Article 246A: Special Provision for GST Law-Making Power

CONSTITUTION OF INDIAArticle 246A

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(1) Notwithstanding anything contained in articles 246 and 254, 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. (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods or services or both takes place in the course of inter-State trade or commerce.

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💰 Article 246A: GST Powers

Special provision for the Union and States to levy GST.

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Art. 246ASpecial provision for GST

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Both levelsUnion and States may levy GST

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279AGST Council created

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101stInserted by the 101st Amendment

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IGSTInter-State supplies under IGST

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ExamA constitutional carve-out for GST

💡The trap: Article 246A gives both the Union and the States power to levy GST, a special constitutional arrangement.

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Concurrent, not hierarchical: Article 246A gives Parliament and State Legislatures CONCURRENT power to make GST laws – overriding Articles 246 and 254 – and gives Parliament EXCLUSIVE power over inter-State GST.

In 2022, the Supreme Court settled a huge question about GST: can the GST Council simply order Parliament and every State what tax rate to charge? Article 246A says no — and the answer turns on one phrase: “Notwithstanding anything contained in articles 246 and 254.”

📑 Contents

1The One-Line Job of Article 246A
2Clause (1): Parliament + Every State Legislature
3Clause (2): Parliament Alone for Inter-State GST
4The Double Override: Articles 246 and 254
5Why India Needed a New Article
6246A and 279A: Power vs. Council
7Mohit Minerals (2022): The Council Can Only Recommend
8The Ocean Freight IGST Case
9The 101st Amendment, Step by Step
10The Dual GST in Practice
11Article 269A: Levy and Apportionment
12The GST Council’s Design (Article 279A)
13Article 265: No Tax Without a Law
14GST 2.0 (September 2025): Rate Rationalisation
15What Clause (1) Actually Grants
16Clause (2): Exclusive Over What?
17The 246/254 Override Trap
18Mohit Minerals: Binding or Not?
19Which Amendment Act Inserted 246A?
20GST 2.0 and the 56th Council Meeting
21The Council’s Word Is Not Law
22IGST Apportionment in the News

Must Know

The One-Line Job of Article 246A

What it doesArticle 246A gives Parliament, and subject to clause (2), the Legislature of every State, power to make laws on goods and services tax imposed by the Union or by the State.
Why concurrentGST is a dual levy: the Centre charges CGST and each State charges its own SGST on the same intra-State supply. Both levels therefore need their own law-making power, and neither should depend on the other’s permission.
How it departsIt opens with “Notwithstanding anything contained in articles 246 and 254,” which sets GST aside from the normal division of taxing subjects.
TakeawayOne article, two independent lawmakers: Parliament and every State Legislature, each with direct constitutional power.

Clause (1): Parliament + Every State Legislature

The text“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.”
Why the phrasing“Imposed by the Union or by such State” mirrors the dual structure: the Union’s GST and each State’s own GST are separate levies even when they fall on the same supply.
How it worksA State law governs that State’s SGST; a Union law governs CGST; both trace their authority to the same Article 246A(1).
Why it mattersStates are not delegates of Parliament here. The Constitution hands the power to them directly, which is why each State can legislate independently.

Clause (2): Parliament Alone for Inter-State GST

The text“Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods or services or both takes place in the course of inter-State trade or commerce.”
Why exclusiveA supply crossing State lines must face one uniform levy. If every State could legislate on it, the same transaction could be taxed at every border it touches.
How it shows upThis clause is the constitutional root of the Integrated GST Act, 2017 (IGST), which taxes inter-State supply exactly once.
So whatIntra-State supply = both levels legislate; inter-State supply = Parliament only. That clean split is the whole design of the Article.

The Double Override: Articles 246 and 254

What 246 doesArticle 246 distributes law-making subjects among the Union List, State List and Concurrent List — the backbone of India’s federal division of powers.
What 254 doesOn a Concurrent subject, a Union law prevails over a repugnant State law; a later State law yields to an earlier Union law in the same field.
Why 246A overrides bothGST does not sit neatly on any List. Without the override, a State GST law could be struck down as repugnant to a Union GST law under Article 254.
MechanismThe opening “Notwithstanding anything contained in articles 246 and 254” suspends both Articles for GST, letting Parliament and States legislate without hierarchy.
TakeawayArticle 246A creates a self-contained GST field that lives outside the three Lists.

Good to Know

Why India Needed a New Article

Before 2016Taxing goods was a State subject; taxing services was a Union subject. They were separate tax fields governed by separate laws and separate legislatures.
The problemGST taxes the value chain of goods and services as one seamless levy. The old split could not host a single integrated tax on both.
How it was fixedThe 101st Amendment Act, 2016 inserted Article 246A as a special provision instead of patching individual entries of the two Lists.
TakeawayYou cannot build a nationwide GST by amending two lists piecemeal — you need a new, dedicated power, and that is what 246A is.

246A and 279A: Power vs. Council

Article 246AGives the law-making power to Parliament and the State Legislatures.
Article 279ASeparately creates the GST Council to recommend rates, exemptions and thresholds.
Why both existThe amendment separates who decides (the legislatures) from who recommends (the Council). The two provisions are deliberately not merged into one.
How it mattersBecause 246A grants independent power to each legislature, the Council’s advice cannot bind either level. The Council is a recommending body, not a fourth legislature.

The Ocean Freight IGST Case

FactsThe same 2022 ruling struck down the IGST reverse-charge on ocean freight in the case of CIF imports.
Why double taxationThe import of goods was already being taxed; charging IGST again on the freight component taxed the very same import transaction a second time.
MechanismUnder CIF terms the freight is part of the value of the goods, so a separate levy on the freight duplicated the tax on that same value.
TakeawayClause (2)’s exclusivity exists to protect inter-State supply from being taxed twice — and the Court enforced exactly that protection.

✅ Test Yourself

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Great to Know

The 101st Amendment, Step by Step

2014The government introduces the 122nd Constitution Amendment Bill, 2014 in the Lok Sabha to overhaul taxation.
2016Parliament passes the Bill, and on 8 September 2016 the President’s assent makes it the 101st Constitutional Amendment Act.
What changedIt inserted Articles 246A, 269A and 279A and amended Articles 248, 249, 250, 268, 269, 270, 271, 286, 366 and 368.
Why so many changesGST touches taxing entries across the Lists, inter-State trade under Article 286, and definitions under 366 — one amendment had to rewire all of them together.
Why the number changedThe Bill began life as the 122nd Amendment Bill, 2014, but by the time it passed in 2016 it became the 101st Amendment Act — examiners love this numbering shift.

The Dual GST in Practice

Intra-State supplyUnder 246A(1), Parliament enacts the CGST Act and each State enacts its own SGST Act; both apply to the same intra-State supply.
Inter-State supplyUnder 246A(2), Parliament alone enacts the IGST Act; the Centre collects IGST and apportions it to the States.
Why two levelsThe Constitution keeps the Centre and States as co-equal taxing authorities on GST rather than folding everything into a single merged tax.
How to recallCGST plus SGST = intra-State; IGST = inter-State. The supply’s location decides which clause of 246A governs.
Why it mattersSeamless input tax credit across State borders is only possible because inter-State supply is taxed once under IGST rather than by every State.

Article 269A: Levy and Apportionment

269A(1)GST on inter-State supply (IGST) is levied and collected by the Government of India.
269A(2)Parliament fixes by law how IGST is apportioned between the Union and the States — the Integrated GST Act is that law.
Why separate from 246AArticle 246A decides who can make the law; Article 269A decides who levies and how the money is split. Power and purse live in two provisions.
So whatThe IGST mechanism prevents double taxation of inter-State supply while still sharing the revenue with the States.
How it prevents double taxThe buyer in the importing State claims the IGST credit, which flows back to the exporting State — so the tax is collected once and shared, not levied twice.

The GST Council’s Design (Article 279A)

CompositionThe Union Finance Minister chairs the Council; the Union Minister of State for Finance and one minister nominated by each State are members.
VotingThe Centre holds one-third of the votes and the States two-thirds; decisions need a three-fourths majority of the votes cast.
Why weightedStates together can outvote the Centre, yet no small group of States can impose rates because a 3/4 supermajority forces consensus.
How it fitsThe Council recommends; Article 246A’s independent legislative power means those recommendations still have to be enacted to take effect.
TakeawayThe Council is a federal, consensus-driven body — it coordinates, but Article 246A keeps the actual law-making power with the legislatures.

Article 265: No Tax Without a Law

The ruleArticle 265 says no tax shall be levied or collected except by authority of law.
Why it matters hereGST rates are taxes, so they need a statute enacted under 246A — a Council resolution alone is not authority of law.
How it connectsThis is the deeper reason recommendations are non-binding: without a legislature’s law, there is nothing lawful to collect.
Takeaway246A gives the power, 265 demands the law, and the GST Council sits in between, only recommending.
So whatLink 246A with 265 in answers: the power to make GST law exists, but the levy is valid only when a law under that power actually imposes it.

GST 2.0 (September 2025): Rate Rationalisation

DevelopmentThe 56th GST Council meeting (3-4 September 2025) approved what is being called “GST 2.0.”
The changeThe four-slab structure of 5%, 12%, 18% and 28% collapsed into essentially two main slabs — 5% and 18% — with a new 40% “demerit” rate for luxury and sin goods.
When it appliedMost of the new rates took effect from 22 September 2025.
Why the process was heavyBecause 246A gives each legislature its own power, Parliament and every State had to separately amend their own GST laws. The Council’s recommendation alone changed nothing.
So whatGST 2.0 is a live illustration of 246A in action: a rate change is a constitutional process, not a single executive order.

PYQ / Exam Angle

CDS II 2017: Why the GST Needed an Amendment

QuestionCDS and other competitive exams ask why a constitutional amendment was needed for GST — because both Union and States had to surrender taxation powers.
WhyGST is levied by both levels under Article 246A, so it required the 101st Amendment.
LinkSource: CDS II 2017 (see Q112).

What Clause (1) Actually Grants

Trap option“Exclusive power to Parliament to make GST laws” — wrong: clause (1) is concurrent; it is clause (2) that is exclusive.
Fact testedArticle 246A(1) gives Parliament AND every State Legislature power over GST imposed by the Union or by that State.
DistractorOptions naming only Parliament forget the State side; options naming only States ignore “subject to clause (2).”
EliminateIf an option says States have no GST law-making power at all, eliminate it — they hold it directly under 246A(1).
TryRephrase the clause: notwithstanding 246 and 254, Parliament and State Legislatures can make GST laws.

Clause (2): Exclusive Over What?

Fact testedClause (2) gives Parliament exclusive power where the supply takes place in the course of inter-State trade or commerce.
Trap option“All goods and services” — wrong: intra-State GST remains a shared field under clause (1).
Distractor“Imports and exports only” — too narrow; clause (2) covers every inter-State supply, not just cross-border trade.
How to recallInter-State = IGST = Parliament only; intra-State = CGST + SGST = both levels.

The 246/254 Override Trap

Trap option“Article 246A places GST in the Concurrent List” — wrong: 246A operates outside the Lists by overriding 246.
Fact testedThe opening words “Notwithstanding anything contained in articles 246 and 254” suspend both provisions for GST.
Why askedExaminers test whether you know 246A is a self-contained special provision rather than an entry in any List.
EliminateAny option describing GST as a “Union List subject” or “Concurrent List subject” ignores the override.

Mohit Minerals: Binding or Not?

Fact testedGST Council recommendations are NOT binding on Parliament or the State Legislatures (2022).
Trap option“Binding on States but not the Centre” — wrong on both counts; the ruling applies to every legislature.
Phrase to quoteThe Court described the scheme as one of “shared, not hierarchical sovereignty.”
EliminateIf an option says the Council decides or orders rates, it contradicts the ruling.

Which Amendment Act Inserted 246A?

Fact testedThe 101st Constitutional Amendment Act, 2016 inserted Article 246A.
Trap option“122nd Amendment Act” — there is no such Act; the 122nd Amendment Bill of 2014 became the 101st Amendment Act on passage.
DistractorThe 100th, 102nd and 103rd Amendments deal with other matters (border adjustment, NCM status, EWS reservation).
How to recall101 = GST; 102 = NCM; 103 = EWS. GST launched on 1 July 2017, under the 101st Amendment.

Current Affairs / So What

GST 2.0 and the 56th Council Meeting

DevelopmentOn 3-4 September 2025, the 56th GST Council meeting approved “GST 2.0,” a sweeping rate rationalisation.
Why it mattersThe old four slabs (5/12/18/28) shrank to two main slabs (5% and 18%) plus a new 40% demerit rate — the biggest rate shake-up since GST’s launch in 2017.
So whatBecause of 246A, the change required Parliament and each State to amend its own GST law separately. Watch for “Council decided” vs. “legislature enacted” questions.

The Council’s Word Is Not Law

DevelopmentSince Mohit Minerals (2022), every GST Council recommendation must travel through Parliament or a State Legislature before it becomes law.
Why it mattersGST 2.0 showed the machinery in action: the Council recommends, legislatures amend, and only then do rates take effect.
So whatIn current-affairs reading, a headline like “Council announces new rate” is shorthand — the legal act is the legislature’s amendment.

IGST Apportionment in the News

DevelopmentInter-State GST continues to raise settlement and apportionment questions between the Centre and the States.
Why it mattersArticle 269A(2) lets Parliament decide apportionment by law — the IGST Act — and disputes over unmatched balances recur in CAG and news reports.
So whatConnect 246A(2) with 269A: inter-State GST is a Union levy whose proceeds are constitutionally shared with the States.