Article 269A

Levy and Apportionment of Integrated GST (IGST)

Official heading: “Levy and collection of goods and services tax in course of inter-State trade or commerce”

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Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XII, Article 269A, printed pages 158–159
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Last human legal review: Not yet reviewed

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1. In One Sentence

Provides for the levy and collection of Integrated GST (IGST) on inter-State trade and imports by the Union, apportioning proceeds between the Union and destination States.

2. What It Means in Everyday Language

Inserted by the 101st Amendment in 2016, Article 269A is the financial backbone of India’s Integrated Goods and Services Tax (IGST) system.

Clause (1) provides that GST on supplies in the course of inter-State trade or commerce is levied and collected exclusively by the Government of India, and then apportioned between the Union and the States based on parliamentary law on the recommendation of the GST Council.

The explanation to clause (1) establishes that imports of goods or services into India are deemed to be supplies in the course of inter-State trade, subjecting them to IGST alongside basic customs duties.

Under clause (2), the amount apportioned to a State does not form part of the Consolidated Fund of India, preserving destination-based state tax rights.

Under clause (5), Parliament is empowered to formulate principles for determining the place of supply and when a supply occurs in the course of inter-State trade or commerce.

3. Practical Illustrative Example

Everyday Scenario:

A software company in Bengaluru licenses cloud software to a hospital network in Odisha, or an Indian manufacturer imports industrial robotics from Germany.

Core takeaway: Under Article 269A, the Central Government levies and collects IGST and automatically apportions the destination State’s half to Odisha.

Illustrative Notice: The formula for apportioning IGST between the Centre and States is determined on the binding recommendation of the GST Council.

4. Important Limits, Qualifications & Exceptions

Article 269A establishes seamless destination-based taxation for cross-border and interstate trade.

Destination-based principle: Tax revenue flows to the State where goods or services are consumed.
Import integration: Cross-border imports are legally treated as inter-state supplies subject to IGST.
Place of supply rules: Parliament enacts statutory principles determining when a transaction is interstate.

5. Operative Constitutional Text

(1) Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. Explanation.—For the purposes of this clause, supply of goods, or of services, or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce. (2) The amount apportioned to a State under clause (1) shall not form part of the Consolidated Fund of India. (3) Where an amount collected as tax has been used for payment of the tax levied by a State under article 246A, such amount shall not form part of the Consolidated Fund of India. (4) Where an amount collected as tax by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State. (5) Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part XII, Article 269A, printed pages 158–159 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource