PART V
FREEDOM OF TRADE, COMMERCE WITHIN INDIA
Part XIII of the Constitution contemplates ‘economic unity’ among the states. The Constitution guarantees freedom of trade, commerce and intercourse and prohibits imposition of taxes by the states in regional interest. This guarantee came to be tested in 1961 with an Assam law that levied a tax on the quantity of goods transported through the state’s inland waterways and roads. Because the law did not account for the distance covered for transportation, the Supreme Court invalidated it when it interfered with the dispatch of tea from Assam to Calcutta. Currently, states can impose non-discriminatory entry tax to share the tax burden between importing and exporting states, but protectionist regional taxes remain prohibited.
THE EXECUTIVE’S LAWMAKING POWERS
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