THE POWER TO LEVY TAX :

The power to levy tax is drawn from the Indian Constitution as it is the fundamental law and source of all laws therein. Since G.S.T. requires different kind of taxation powers than provided for in the present Constitution thus certain Constitutional Amendments have been necessitated in this context.

The 122ndConstitutional Amendment Bill is introducing Article 246A which would confer simultaneous powers on both the Parliament and State Legislatures to make laws with respect to goods and services tax imposed by the Union or by such State. The Article is as follows:

Article 246A :
(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 of services, or both takes place in the course of inter-State trade or commerce. Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.’’

4. In pursuance of the same Section 7 of the Model GST Act levies CGST /SGST and Section 4 of the Model IGST Act levies IGST. These are further elucidated upon in the description of the incidence of tax.