Article 268A of CoI : Article 268A: Service tax levied by Union and collected by the Union and the States: Omitted.

Explanation using Example

Example 1:

Before the Constitution (One Hundred and First Amendment) Act, 2016, service tax was a tax levied by the Union government on services provided. For instance, if a restaurant in Mumbai provided dining services, it would charge service tax on the bill. This tax was collected by the Union government and then distributed between the Union and the States.

After the amendment, Article 268A was omitted, and the Goods and Services Tax (GST) was introduced. Now, instead of service tax, the restaurant charges GST on the bill. The GST is a comprehensive tax that includes both Central GST (CGST) and State GST (SGST), which are collected and shared between the Union and the State government of Maharashtra.

Example 2:

Consider a software company in Bangalore that provides IT services to clients across India. Before the amendment, the company would charge service tax on its invoices, which was collected by the Union government. The revenue from this service tax was then shared between the Union and the State governments.

Post-amendment, with the introduction of GST, the company now charges Integrated GST (IGST) for inter-state services. For services provided within Karnataka, it charges both CGST and SGST. This new system simplifies the tax structure and ensures that both the Union and the State governments receive their share of the tax revenue directly.