Part XII - Finance & Property • Article

Article 268A Simplified: Service tax levied by Union and collected and appropriated by the Union and the States

Article 268A was a temporary clause added in 2003 to allow the Union Government to levy a Service Tax, which was shared with the states. It was deleted in 2016 when Service Tax was replaced by the unified Goods and Services Tax (GST) system.

Official Text

Omitted by the Constitution (One Hundred and First Amendment) Act,2016, s. 7 (w.e.f. 16-9-2016).. Ins. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 2 (date not notifed).

Simple Meaning

Explain Like Ten

This was a rule about taxing services (like telephone calls or bank accounts). When we combined all different taxes into one big tax called GST in 2016, we didn't need this separate service tax rule anymore.

Student Mode

Inserted by the 88th Amendment Act (2003) to enable the levying and sharing of service tax. Omitted by the 101st Amendment Act (2016) when service tax was subsumed into the Goods and Services Tax (GST).

Example

Before 2016, if you paid service tax on your phone bill, it was governed by Article 268A. Today, that is replaced by Goods and Services Tax (GST) under Article 246A.

Key Takeaway

The omission of Article 268A reflects the transition of India's indirect tax system to the unified GST regime.

FAQs

Which tax was governed by Article 268A?

It governed Service Tax, which was levied on the provision of services.

Why was Article 268A omitted?

It was omitted because Service Tax was merged into the single Goods and Services Tax (GST) system in 2016.