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.
Over the next few weeks, Assembly elections are scheduled to be held in five States – Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. As parties prepare for the upcoming elections, we take a look at the electoral trends in these states over the past 25 years. We see that electoral fortunes in some states have fluctuated widely. The electoral mandate in UP has varied over the last 25 years. Five different parties -- Congress, Janata Dal, BJP, SP and BSP have been the single largest party in the Assembly at some point in time. In Punjab, the Akalis and the Congress have alternately controlled the government. In Uttarakhand, the 2007 elections saw the BJP take over control from the Congress. In Manipur and Goa, Congress has been dominant player in elections. In both states, it emerged as the single largest party in all but one election since 1984. In Manipur, the Congress lost this status to the Manipur State Congress Party (MSCP), a splinter group of the Congress in 2000. In Goa, it lost this status to BJP in 2002. The results of Uttar Pradesh elections will have the highest impact on national politics. The state has 80 out of 543 elected seats in Lok Sabha and 31 out of 231 elected seats in Rajya Sabha. The results could give an indication of the prospects for these parties in the next general elections, and may also change the composition of Rajya Sabha over the next few years. Given that there are five parties (BSP, SP, BJP, Congress and RLD) with a significant base in the state, the possibilities of post poll arrangements are also wide open. For more details, see our Vital Stats.
