No restriction on Inter-State Trade and Commerce :
Each State and Union Territory has certain autonomy. However, the trade and commerce has to be free all over India, without which India cannot be ‘One Nation’. As we saw above, tax on Inter-State sale/purchase can be imposed only by Central Government. Provisions in respect of inter-State Trade and Commerce in Constitution of India are summarised below :
♦ Trade, commerce and intercourse throughout the territory of India shall be free, subject to provisions of Articles 302 to 304 of Constitution. (as stated below) [Article 301 of Constitution of India]
♦ Restrictions on trade or commerce can be placed by Parliament in the public interest. [Article 302]
♦ No discrimination can be made between one State and another or give preference to one State over another [Article 303(1)]. Such discrimination or preference can be made only by Parliament by law to deal with the situation arising from scarcity of goods [Article 303(2) of Constitution of India]
♦ State can impose tax on goods imported from other States or Union Territories, but a State cannot discriminate between goods manufactured in the State and goods brought from other States [Article 304(1) of Constitution of India].
♦ State Legislature can impose reasonable restrictions on freedom of trade and commerce within the state in public interest. However, such bill cannot be introduced in State Legislature without previous sanction of the President [proviso to Article 304].
These provisions are continuing without any change.