Constitution Section 304 — Restrictions on trade, commerce and intercourse among States

Part XIII — TRADE, COMMERCE AND INTERCOURSE WITHIN THE — TERRITORY OF INDIA

Constitutional

Summary

A state legislature can pass a law that taxes goods brought in from other states or union territories, as long as the same tax is also applied to similar goods made or produced within that state, and the tax does not treat imported goods differently from local goods. The state legislature can also pass laws that place reasonable limits on the free movement of trade, business, or travel within or into the state, if those limits are needed for the public good. However, any bill or change to a law that would create such limits cannot be introduced in the state legislature without the President’s prior approval.

Official Text

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.