Article 304 of CoI : Article 304: Restrictions on trade, commerce and intercourse among States.

Explanation using Example

Example 1:

Scenario: A state government in India, say Maharashtra, decides to impose a tax on all electronic goods sold within the state to boost its revenue.

Application of Article 304(a): Maharashtra can impose a tax on electronic goods imported from other states like Karnataka or Gujarat, but this tax must be the same as the tax imposed on electronic goods manufactured within Maharashtra. This ensures that there is no discrimination between goods imported from other states and those produced locally.

Example: If Maharashtra imposes a 10% tax on electronic goods manufactured within the state, it must also impose a 10% tax on electronic goods imported from Karnataka or Gujarat. This maintains a level playing field for all electronic goods sold in Maharashtra.

Example 2:

Scenario: The state of Kerala wants to regulate the sale of certain agricultural products to ensure food safety and public health.

Application of Article 304(b): Kerala can impose reasonable restrictions on the trade of these agricultural products within the state if it is in the public interest. However, before introducing such a bill or amendment, Kerala must obtain the previous sanction of the President of India.

Example: Kerala decides to implement stringent quality checks on all vegetables sold within the state to prevent the sale of contaminated produce. This restriction is deemed necessary for public health. Before this regulation can be enforced, Kerala must get approval from the President. Once approved, the state can legally enforce these quality checks on vegetables, whether they are grown within Kerala or imported from other states.