CONSTITUTIONAL AMENDMENT

The Constitutional (122nd) Amendment Bill, 2014 became the Constitutional (101st Amendment) Act, 2016 upon Presidential Assent on 08.09.16.

A question may to come to one’s mind as to why constitutional amendment was needed?

Under the present system, the power to levy taxes on goods and services shared between the Union & States. For example – Service Tax was levied by Union while sales Tax/VAT was levied by States. Under the proposed unified system, both Centre & State will together levy tax on every transaction of supply of goods or services. This is where the need to amend the constitutional arose to confer simultaneous power on Parliament & State Legislatures to make laws for levying Goods & Services Tax (GST) on every transaction of supply of goods or services.

We would refer to each amendment in the Constitutional Amendment Act, 2016 as under:

Sr No.	Article	Issue
1	Insertion of Article 246A	Gave power to the Parliament & State Legislatures to make laws on GST levied by Union & States. Parliament has exclusive power to legislate when supply is in the course of inter-state trade or commerce.
2	Amendment of Article 248	Consequential amendment in view of insertion of Article 246A.
3	Amendment to Article 249	Consequential amendment in view of insertion of Article 246A.
4	Amendment to Article 250	Consequential amendment in view of insertion of Article 246A.
5	Amendment to Article 268	Omission of power of Central Government to levy duty of excise on medicinal and toilet preparations.
6	Omission of Article 268A	Omission of power of Central Government to levy taxes on services as tax on serviceshas been brought under GST.
7	Amendment of Article 269	Consequential amendment in view of insertion of Article 269A. Article 269 provides for the taxes levied and collected by the Union but assigned to States.
8	Insertion of Article 269A	It provides for GST on supplies in the course of inter-state trade or commerce levied & collected by Central Government and apportion of such tax between Union & States in the manner provided by Parliament by law on the recommendations of GST Council. It also provides for devising the principles for determining place of supply and when a supply takes place in the course of inter-state trade or commerce.
9	Amendment to Article 270	The amendment provides for distribution of GST levied and collected by the Central Government.
10	Amendment to Article 271	The amendment restricts the power of Parliament to impose surcharge on the goods & services on which GST is levied.
11	March, 2014	The revised draft of the constitutional bill was sent to EC for consideration.
12	Amendment of Article 286	This is a consequential amendment.
13	Amendment of Article 366	This amendment provides for definition of “Goods & Services Tax”, ‘Services’ & ‘States’. ‘GST’ means any tax on supply of goods or services or both except on the supply of the alcoholic liquor for human consumption”. ‘Services” means anything other than goods.
14	Amendment of Article 368	Insertion of Article 279A (GST Council) in clause (a) of Proviso to Article 368(2). Thus, any modification in GST Council shall require the ratification by the legislatures of one half of the states.
15	Amendment of Sixth Schedule.	Empowers District Council for an autonomous district to levy and collect taxes on entertainment and amusements within such districts.
16	Amendment of Seventh Schedule	Consequential amendments in the Union List/State List Entries.
17	Section 18 of the Constitutional (101st Amendment) Act, 2016	It provides for mandatory compensation to states for 5 years for loss of revenue on account of introduction of GST. This Act deleted the provision for applicability of 1% additional tax on inter-state transactions.
18	Section 19 of the Constitutional (101st Amendment) Act, 2016.	This section provides a timeframe of 1 year within which subsuming of different indirect taxes into GST would take place and enable the Competent legislature to amend or repeal their existing laws.
19	Section 20 of the Constitutional (101st Amendment) Act, 2016	This section provides power to the President to remove difficulties within a period of 3 years.