INTER-STATE TRADE AND COMMERCE

  • Articles 301 to 307 in Part XIII of the Constitution deal with the trade, commerce and intercourse within the territory of India.
  • Article 301 declares that trade, commerce and intercourse throughout the territory of India shall be free.
  • The object of this provision is to break down the border barriers between the states and to create one unit with a view to encourage the free flow of trade, commerce and intercourse in the country.
  • The freedom under this provision is not confined to inter-state trade, commerce and intercourse but also extends to intra-state trade, commerce and intercourse.
  • Thus, Article 301 will be violated whether restrictions are imposed at the frontier of any state or at any prior or subsequent stage.
  • The freedom guaranteed by Article 301 is a freedom from all restrictions, except those which are provided for in the other provisions (Articles 302 to 305) of Part XIII of the Constitution itself. These are explained below:
  1. Parliament can impose restrictions on the freedom of trade, commerce and intercourse between the states or within a state in public interest.But, the Parliament cannot give preference to one state over another or discriminate between the states except in the case of scarcity of goods in any part of India.
  2. The legislature of a state can impose reasonable restrictions on the freedom of trade, commerce and intercourse with that state or within that state in public interest. But, a bill for this purpose can be introduced in the legislature only with the previous sanction of the president. Further, the state legislature cannot give preference to one state over another or discriminate between the states.
  3. The legislature of a state can impose on goods imported from other states or the union territories any tax to which similar goods manufactured in that state are subject. This provision prohibits the imposition of discriminatory taxes by the state.
  4. The freedom (under Article 301) is subject to the nationalisation laws (i.e., laws providing for monopolies in favour of the Centre or the states). Thus, the Parliament or the state legislature can make laws for the carrying on by the respective government of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.

The Parliament can appoint an appropriate authority for carrying out the purposes of the above provisions relating to the freedom of trade, commerce and intercourse and restrictions on it. The Parliament can also confer on that authority the necessary powers and duties. But, no such authority has been appointed so far.

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