Article 304

State Powers to Tax and Impose Reasonable Restrictions on Interstate Trade

Official heading: “Restrictions on trade, commerce and intercourse among States”

Check this article against the official editionAwaiting human legal review

Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XIII, Article 304, printed pages 171–172
Last human source-link check: Not yet checked
Last human legal review: Not yet reviewed

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1. In One Sentence

Authorizes State Legislatures to levy non-discriminatory taxes on imported goods and impose reasonable restrictions in the public interest with Presidential sanction.

2. What It Means in Everyday Language

Article 304 gives State Legislatures limited authority to regulate and tax interstate commerce.

Under clause (a), a State may tax goods brought in from other States or Union territories, but only at the same rate as similar goods manufactured inside the State (no protectionist tariffs).

Under clause (b), a State can impose reasonable restrictions on interstate trade in the public interest, provided the Bill receives prior Presidential sanction (or subsequent assent under Article 255).

3. Practical Illustrative Example

Everyday Scenario:

A State imposes an entry tax of 5% on cement manufactured within the State and 15% on cement imported from neighboring States.

Core takeaway: The discriminatory 15% tax violates Article 304(a), because a State cannot create protective tax barriers favoring domestic industry over outside competitors.

Illustrative Notice: A uniform 5% tax applied equally to all cement regardless of origin is fully constitutional under Article 304(a).

4. Important Limits, Qualifications & Exceptions

Article 304 reconciles State fiscal autonomy with national common market unity.

Equal tax treatment: Imported goods cannot be taxed at a higher rate than locally manufactured equivalent goods.
Reasonable restrictions test: Restrictions under clause (b) must satisfy the test of reasonableness and serve the public interest.
Presidential sanction requirement: State legislation restricting interstate commerce requires prior presidential sanction or assent under Article 255.

5. Operative Constitutional 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.

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 XIII, Article 304, printed pages 171–172 • 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