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.
Both Lok Sabha and Rajya Sabha have seen disruptions this morning on the issue of FDI in multi-brand retail. The issue may be discussed in Parliament under various procedures. We have explained these in an Op-Ed in today’s Indian Express. The summary is given below.
In sum, there are several methods. with different political implications. available to MPs who would like a debate on the FDI issue. A no-confidence motion would question the continuance of the current government. An adjournment motion could censure the government. A motion under Rule 184 or to annul the FDI regulation could require reversal of the policy. A debate under Rule 193 (without a vote) would only require a response from the minister.
The stance taken by various parties will be based on a combination of their views on the issue, the potential costs to the stability of the government under the given procedure, as well as the likely positions that other parties may take. This may guide the choice of procedure adopted by parties that want to raise the issue.
