⦿ Articles 268 to 293 in Part XI I of the Constitution deal with Centre-state financial relations. Besides these, there are other provisions dealing with the same subject.
⦿ The Parliament has exclusive power to levy taxes on subjects enumerated in the Union List
⦿ The state legislature has exclusive power to levy taxes on subjects enumerated in the State List.
⦿ There are no tax entries in the Concurrent List. But, the 101 st Amendment Act of 2016 has made an exception by making a special provision with respect to goods and services tax.
⦿ This Amendment has conferred concurrent power upon the Parliament and St.’lte Legislatures to make laws governing goods and services.
⦿ State legislature can impose taxes on professions, trades, callings and employments
⦿ A state legislature is prohibited from imposing a tax on the supply of goods or services.
⦿ A state legislature can impose tax on the consumption or sale of electricity
⦿ A state legislature can impose a tax in respect of any water or electricity stored, generated, consumed, distributed
⦿ The 80th Amendment Act of 2000 and the 101st Amendment Act of 2016 have introduced major changes in the scheme of the distribution of tax revenues between the centre and the states.
⦿ The 101st Amendment has paved the way for the introduction of a new tax regime (Le., goods and services tax – GST) in the country.
the Amendment conferred concurrent taxing powers upon the Parliament and the State Legislatures to make laws for levying GST on every transaction of supply of goods or services or both.
⦿ The Amendment provided for subsuming of various central indirect taxes and levies such as (i) Central Excise Duty, (ii) Additional Excise Duties, (iii) Excise Duty levied under the Medicinal and Toilett Preparations (Excise Duties) Act, 1955, (iv) Service Thx, (v) Additional Customs Duty commonly known as Countervailing Duty, (vi) Special Additional Duty of Customs, and (vii) Central Surcharges and Cesses so far as they related to the supply of goods and services.
