CDS (II) 2021 General Knowledge · Question 71 of 120

Correct — D, The State Goods and Services Tax Act. The Constitution (One Hundred and First Amendment) Act, 2016 inserted Article 246A, and that article deliberately gives the power to two legislatures rather than one: 'Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.' So the Union side of the tax was legislated by Parliament in 2017 through the Central Goods and Services Tax Act, the Integrated Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act — all four assented to in April 2017. The State side was legislated separately by each State's own legislature, each passing its own State Goods and Services Tax Act. That is the one Parliament did not enact.

• (a)The Central Goods and Services Tax Act — Parliament did enact this. The Central Goods and Services Tax Act, 2017 is the Union's charging law for supplies within a State.
• (b)The Integrated Goods and Services Tax Act — Parliament did enact this too. The Integrated Goods and Services Tax Act, 2017 covers inter-State supplies and imports, a field Article 246A(2) reserves exclusively to Parliament.
• (c)The Goods and Services Tax (Compensation to States) Acts — Parliament enacted this as well, to fund the compensation promised to States for revenue loss in the transition. The paper prints the word as 'Acts' in the plural where there is a single Act of that name.

Goods and services tax in India is a dual tax on the same supply: the Centre levies central GST and the State levies State GST on a supply within a State, while inter-State supplies attract a single integrated GST collected by the Centre and apportioned. That design is why the constitutional amendment had to create a concurrent taxing power rather than move the subject from one list to another, and why the legislation had to come in matched Union and State halves. The GST Council, set up under Article 279A, recommends rates and the design questions that both levels then implement.

The question rewards a candidate who noticed that GST is a dual tax and not a single central levy. If both the Centre and the States tax the same supply, then both must legislate, and it follows immediately that Parliament could not have passed the State Act. Two details in the printed options are worth flagging honestly and neither changes the answer: the compensation law is titled in the singular, and Parliament's fourth 2017 GST law, the Union Territory Goods and Services Tax Act, is not among the options at all. The Union Territories with legislatures, Delhi and Puducherry at that time, passed their own State-style GST Acts through their own assemblies.

• Article 246A, inserted by the Constitution (One Hundred and First Amendment) Act, 2016, gives Parliament and every State legislature power to make laws on goods and services tax.
• Article 246A(2) reserves to Parliament the exclusive power to legislate on GST for inter-State supply.
• Parliament enacted four GST laws in 2017 — the Central, Integrated, Union Territory and Compensation to States Acts.
• Each State legislature enacted its own State Goods and Services Tax Act.
• Article 279A creates the Goods and Services Tax Council, which recommends rates and the date from which the five petroleum products are to be taxed.

• Assuming that because GST is a single national tax it must rest on a single central law.
• Forgetting the Union Territory GST Act when listing what Parliament passed in 2017.
• Attributing GST to the 122nd Amendment Bill number rather than to the 101st Amendment Act as enacted.

As an odd-one-out among the GST statutes, as a question on which amendment introduced GST, or as a statements item on the GST Council.

• practice — not a real PYQ

  The power of both Parliament and the State legislatures to make laws on goods and services tax comes from which one of the following Articles?

  • (a)Article 246
  • (b)Article 246A
  • (c)Article 268
  • (d)Article 279

  Answer(b) Article 246A — inserted by the 101st Amendment Act, 2016, it creates the concurrent taxing power that a dual GST needs.

• practice — not a real PYQ

  Goods and services tax on inter-State supply is levied and collected under which one of the following laws?

  • (a)The Central Goods and Services Tax Act
  • (b)The State Goods and Services Tax Act
  • (c)The Integrated Goods and Services Tax Act
  • (d)The Union Territory Goods and Services Tax Act

  Answer(c) The Integrated Goods and Services Tax Act — inter-State supply is an exclusively parliamentary field under Article 246A(2).