Article 288 of CoI : Article 288: Exemption from taxation by States in respect of water or electricity in certain cases.

Explanation using Example

Example 1:

Scenario: The State of Maharashtra wants to impose a tax on electricity generated by a hydroelectric power plant located on the Godavari River, which flows through multiple states.

Application of Article 288:

1. Clause (1): Since the Godavari River is an inter-State river, any hydroelectric power plant on it would be regulated by a law made by Parliament. Therefore, Maharashtra cannot impose a tax on the electricity generated by this plant unless the President of India provides an order allowing it.
2. Clause (2): If Maharashtra still wants to impose the tax, the State Legislature can pass a law to that effect. However, this law will not be effective until it is reserved for the President's consideration and receives his assent. Additionally, if the law includes provisions for setting tax rates or other details through rules or orders, the President's prior consent is required for making those rules or orders.

Example 2:

Scenario: The State of Karnataka has a law in place from before the commencement of the Constitution that imposes a tax on water distributed by a state-run water authority.

Application of Article 288:

1. **Clause (1):*...

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