What is the entry tax:

Entry tax is imposed by state governments on movement of goods from one state to another. It is levied by the state that receives goods. The entry tax provisions of various states was challenged by some companies on the ground that they are against the concept of free trade and commerce under Article 301 (freedom of trade commerce and intercourse with the territory of India) of the Constitution.

The verdict:

  • A 7:2 majority verdict by the apex court ruled that the tax legislation by the state does not require the consent of the President.
  • It’s relevant because a number of ecommerce firms and their customers have been facing inconvenience owing to the taxes and the rules associated with it.
  • Even though the tax remains in pace for the time being, once GST (Goods and Services Tax) comes into force, would have subsumed the tax law.
  • The decision is important for the current scenario and the past cases where the tax has been charged.

A 7:2 majority verdict by the apex court ruled that the tax legislation by the state does not require the consent of the President under Article 304 B of the Constitution.

The bench had commenced the hearing despite the Centre wanting it to wait till the passage of pending GST (Goods and Services Tax) Bill, which according to it, would have subsumed the tax law under challenge.

However,

Attorney General Mukul Rohatgi had submitted that some arrangement could be made in respect to past demands by the states relating to entry tax after GST Bill, involving a Constitution amendment, was passed by Parliament.

 

Source: DNA India: http://www.dnaindia.com/money/report-supreme-court-rules-states-have-right-to-levy-entry-tax-on-goods-coming-in-2272343

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