The government of West Bengal has recently imposed a tax on the entry of goods into the local areas of the State. According to the Finance Minister, this will help meet 'cost for facilitating trade and industry in the State'. Many States impose entry tax on goods coming into their areas of jurisdiction. Entry Tax is imposed by States under the provisions of Entry 52 of the State List and Article 304 of the Indian Constitution. These read as under: Entry 52, List II of the Seventh Schedule (State List) “Taxes on the entry of goods into a local area for consumption, use or sale therein.” Article 304: Restriction on trade, commerce and intercourse among States "Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law – (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." Are there any restrictions to the power of States to impose entry taxes? The use of the words 'so, however, as not to discriminate ' and 'reasonable restrictions' in the above articles constrain the power of States to some extent. Several petitions challenging the imposition of entry taxes have been filed before courts. In 2008, the Supreme Court has referred the entry tax issue to a larger bench. This case is currently pending. What are the arguments in favour and against the imposition of such taxes? Arguments in favour of entry tax
Arguments against entry tax
In addition to the above, it can also be said that an entry tax goes against the principle envisaged under the Goods and Services Tax (GST) regime. The GST aims to create a common market throughout India without any taxes on inter-state movement of goods. A Constitutional Amendment Bill to facilitate the implementation of GST is currently pending in Parliament.
On November 28, 2012, the Comptroller and Auditor General submitted its report on the implementation of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). According to the report most of the projects initiated under JNNURM have not been completed. For instance with respect to urban infrastructure projects, only 231 projects out of the 1298 sanctioned projects have been completed. Similarly, with respect to housing projects, only 22 of the 1517 projects have been completed. Some of the other key recommendations of the report are:
The need and objectives of JNNURM According to the 2011 census India’s urban population has increased from 286 million in 2001 to 377 million in 2011 . With the increase in urban population, there is a requirement to improve the urban infrastructure and improve the service delivery mechanisms. With these specific objectives in mind, the central government launched the Jawaharlal Nehru National Urban Renewal Mission 2005-2006. The aim of the Mission is to encourage reforms and fast track planned development of identified cities (such as cities with a population of more than 1 million as per the 2001 census). JNNURM has two main components namely : (i) Urban Infrastructure and Governance and (ii) Urban Infrastructure Development for Small and Medium Towns. The duration of JNNURM was from 2005-06 to 2011-12. However, as the projects have not been completed the Government has extended its duration until March 2014. Funds for JNNURM The funds for JNNURM are provided through the Additional Central Assistance. This implies that the funds are provided as grants to the states directly from the centre. In the 2012 Union Budget, the central government has allocated Rs 12,522 crore for JNNURM. This represents around 10 % of the total central assistance through the different schemes to states and union territories in 2012-13. As on June 30 2012, 554 projects at a total cost of Rs 62,253 crore have been sanctioned under the Urban Infrastructure and Governance sub-mission of JNNURM. The table below shows the status of the sanctioned JNNURM projects in the different states. State wise status of the projects under JNNURM (as on August 6, 2012)
| Name of State | Total Allocation (Rs Lakh) | Number of sanctioned projects | Completed Projects |
| Andhra Pradesh | 2,11,845 | 52 | 18 |
| Arunachal Pradesh | 10,740 | 3 | NA |
| Assam | 27,320 | 2 | NA |
| Bihar | 59,241 | 8 | NA |
| Chandigarh | 27,087 | 3 | NA |
| Chattisgarh | 24,803 | 1 | NA |
| Delhi | 2,82,318 | 23 | 4 |
| Goa | 12,094 | 2 | NA |
| Gujarat | 2,57,881 | 72 | 40 |
| Haryana | 32,332 | 4 | NA |
| Himachal Pradesh | 13,066 | 5 | NA |
| Jammu & Kashmir | 48,836 | 5 | NA |
| Jharkhand | 94,120 | 5 | NA |
| Karnataka | 1,52,459 | 47 | 22 |
| Kerala | 67,476 | 11 | NA |
| Madhya Pradesh | 1,32,850 | 23 | 7 |
| Maharashtra | 5,50,555 | 80 | 21 |
| Manipur | 15,287 | 3 | NA |
| Meghalaya | 15,668 | 2 | NA |
| Mizoram | 14,822 | 4 | NA |
| Nagaland | 11,628 | 3 | NA |
| Orissa | 32,235 | 5 | NA |
| Punjab | 70,775 | 6 | 1 |
| Puducherry | 20,680 | 2 | NA |
| Rajasthan | 74,869 | 13 | 2 |
| Sikkim | 10,613 | 2 | NA |
| Tamil Nadu | 2,25,066 | 48 | 12 |
| Tripura | 14,018 | 2 | NA |
| Uttar Pradesh | 2,76,941 | 33 | 4 |
| Uttarakhand | 40,534 | 14 | NA |
| West Bengal | 3,21,840 | 69 | 15 |
Source: Jawaharlal Nehru National Urban Renewal Mission; PRS.
