286. Restrictions as to imposition of tax on the sale or purchase of goods
(1)No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place.-(a)outside the State; or(b)in the course of the import of the goods into, or export of the goods out of, the territory of India.(2)Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1).(3)Any law of a State shall, in so far as it imposes, or authorises the imposition of,--(a)a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or(b)a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.[Editorial comment- The Constitution (Sixth Amendment) Act, 1956, amended article 286 by introducing Clause 286(2), stating parliament can enact a law to determine when the sale takes place under clause(1). Clause 286(3) was added, stating that any state law imposing a tax on goods deemed essential by the legislature is bound by the restrictions of the legislation enacted by the Parliament in this regard. Important Verdict: Bengal Immunity Co. Ltd. vs State Of Bihar And Ors , The State Of Bombay And Another vs The United Motors (India)Ltd & Also Refer ][Editorial comment- The Constitution (Forty-Sixth Amendment) Act, 1982, this amendment modifies article 286 where clause (3) was changed. This is done to give Parliament the ability to set rules and conditions for the manner of levy, rates, and other aspects of the tax on the delivery of goods under a hire-purchase agreement or any other system of payment by installments, as well as on the authority to use any products, by law.Also Refer]
