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Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. In this context, which of the following statements is/are correct?
1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.
2. A state government cannot make a law to impose trade restrictions on another state.
3. A state government can impose taxes on goods imported from other states and union territories.
Select the correct answer using the code given below.
  • a)
    1 and 3 only
  • b)
    2 only
  • c)
    3 only
  • d)
    None
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Article 301 of the Indian Constitution declares that trade, commerce, ...
  • Articles 301 to 307 in Part XIII of the Constitution deal with the trade, commerce, and intercourse within the territory of India. Article 301 declares that trade, commerce, and intercourse throughout the territory of India shall be free. The object of this provision is to break down the border barriers between the states and to create one unit with a view to encouraging the free flow of trade, commerce, and intercourse in the country.
  • The freedom guaranteed by Article 301 is a freedom from all restrictions, except those which are provided for in the other provisions (Articles 302 to 305) of Part XIII of the Constitution itself. These are explained below:
    (i) Parliament can impose restrictions on the freedom of trade, commerce, and intercourse between the states or within a state in the public interest. But the Parliament cannot give preference to one state over another or discriminate between the states except in the case of scarcity of goods in any part of India (Article 303 (2)). Hence statement 1 is not correct, o The legislature of a state can make a law or laws to impose reasonable restrictions on the freedom of trade, commerce, and intercourse with that state or within that state in the public interest. But, a bill for this purpose can be introduced in the legislature only with the previous sanction of the president. Further, the state legislature cannot give preference to one state over another or discriminate between the states. Hence statement 2 is not correct.
    (ii) The legislature of a state can impose on goods imported from other states or the union territories any tax to which similar goods manufactured in that state are subject. This provision prohibits the imposition of discriminatory taxes by the state. Hence statement 3 is correct,
    (iii) The freedom (under Article 301) is subject to the nationalization laws (i.e., laws providing for monopolies in favor of the Centre or the states). Thus the Parliament or the state legislature can make laws for the carrying on by the respective government of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
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Most Upvoted Answer
Article 301 of the Indian Constitution declares that trade, commerce, ...
Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. This means that there should be no barriers or restrictions on the movement of goods and services between different states and union territories within India. However, there are certain limitations to this freedom. Let's analyze the given statements to understand them better:

1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.
This statement is correct. Article 301 prohibits any discrimination or favoritism by the Parliament towards one state over another in inter-state trade and commerce. The idea behind this provision is to ensure a level playing field for all states and promote fair competition and economic integration within the country.

2. A state government cannot make a law to impose trade restrictions on another state.
This statement is incorrect. While Article 301 prohibits the Parliament from imposing restrictions on trade between states, it does not explicitly prevent state governments from doing so. State governments have the power to make laws regarding trade and commerce within their jurisdiction, which may include imposing restrictions on trade with other states. However, any such law must not violate the principles of free trade and commerce enshrined in Article 301 and should be reasonable and non-discriminatory.

3. A state government can impose taxes on goods imported from other states and union territories.
This statement is correct. While Article 301 guarantees the freedom of trade and commerce, it does not prohibit state governments from imposing taxes on goods imported from other states or union territories. However, such taxes should not be discriminatory or excessive, and they should not hinder the free movement of goods and services between states. The Supreme Court has held that any tax imposed by a state government on goods imported from other states must be compensatory in nature and should not create an economic barrier.

In conclusion, statement 1 and statement 3 are correct. The Parliament cannot favor one state over another in inter-state trade and commerce, and a state government can impose taxes on goods imported from other states and union territories. However, statement 2 is incorrect as state governments do have the power to impose trade restrictions on other states, although such restrictions should be reasonable and non-discriminatory.
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Article 301 of the Indian Constitution declares that trade, commerce, ...
C) 3 only
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Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. In this context, which of the following statements is/are correct?1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.2. A state government cannot make a law to impose trade restrictions on another state.3. A state government can impose taxes on goods imported from other states and union territories.Select the correct answer using the code given below.a)1 and 3 onlyb)2 onlyc)3 onlyd)NoneCorrect answer is option 'C'. Can you explain this answer?
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Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. In this context, which of the following statements is/are correct?1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.2. A state government cannot make a law to impose trade restrictions on another state.3. A state government can impose taxes on goods imported from other states and union territories.Select the correct answer using the code given below.a)1 and 3 onlyb)2 onlyc)3 onlyd)NoneCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. In this context, which of the following statements is/are correct?1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.2. A state government cannot make a law to impose trade restrictions on another state.3. A state government can impose taxes on goods imported from other states and union territories.Select the correct answer using the code given below.a)1 and 3 onlyb)2 onlyc)3 onlyd)NoneCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Article 301 of the Indian Constitution declares that trade, commerce, and intercourse throughout the territory of India shall be free. In this context, which of the following statements is/are correct?1. Under no circumstances, the Parliament can favor one state over another in the inter-state trade and commerce between two states.2. A state government cannot make a law to impose trade restrictions on another state.3. A state government can impose taxes on goods imported from other states and union territories.Select the correct answer using the code given below.a)1 and 3 onlyb)2 onlyc)3 onlyd)NoneCorrect answer is option 'C'. Can you explain this answer?.
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