Why was constitutional amendment needed for introducing GST?

The introduction of the Goods and Services Tax (GST) necessitated a constitutional amendment because the existing framework under Article 246 did not allow for concurrent taxation powers [2]. Prior to the amendment, the Constitution strictly demarcated taxing powers: the Centre levied excise duty on manufacturing and service tax, while States levied sales tax or VAT [3]. To implement GST on a concurrent base, where both the Centre and States could simultaneously levy tax on the same transaction of goods and services, a new legislative authority was required [4]. Consequently, the 101st Constitutional Amendment Act, 2016, inserted Article 246A, which conferred simultaneous power upon Parliament and State Legislatures to make laws governing GST [6]. This amendment also established the GST Council under Article 279A to facilitate coordination between the Centre and States [8].

Sources

1. [1] https://cbic-gst.gov.in/pdf/01062019-GST-An-Update.pdf
2. [2] https://dor.gov.in/concept-note-gst
3. [3] https://tgct.gov.in/tgportal/Docs/GST_Overview.pdf
4. [4] https://nja.gov.in/Concluded_Programmes/2021-22/P-1282_PPTs/1.Constitution%20(One%20Hundred%20and%20First%20Amendment)%20Act,%202016.pdf
5. [5] https://gstcouncil.gov.in/gst-council-0
6. [6] https://www.gstcouncil.gov.in/sites/default/files/2024-02/consti-amend-act.pdf
7. [7] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 47: Goods and Services Tax Council > ESTABLISHMENT > p. 434
8. [8] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 47: Goods and Services Tax Council > ESTABLISHMENT > p. 434