Salient Features of the 88th Amendment of the Constitution


The Act of 2003 amended the Constitution, and the government has made significant modifications to Article 270. It was created to allow Parliament to define legislative guidelines for determining the Central Government’s modalities of levying the service tax and collecting the proceeds jointly by the Central Government and State Governments.

The Empowered Committee of State Finance Ministers believes that states should be given the right to tax services and that they should be able to collect an appropriate service tax on significant benefits. The principles under which the states and the federal government would collect and apply service taxes would have to be established by legislation. Service tax and excise duty will be replaced by a new tax known as the Goods and Services Tax (GST).


[15th January, 2004.]

An Act further to amend the Constitution of India.

BE it enacted by Parliament in the Fifty-fourth Year of the Republic of India as follows:-

1. Short title and commencement. – (1) This Act may be called the Constitution (Eighty-eighth Amendment) Act, 2003.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. Insertion of new article 268A. – After article 268 of the Constitution, the following article shall be inserted, namely:-

Service tax levied by Union and collected and appropriated by the Union and the States.

“268A. Service tax levied by Union and collected and appropriated by the Union and the States.-(1) Taxes on services shall be levied by the Government of India and such tax shall be collected and appropriated by the Government of India and the States in the manner provided in clause (2).

(2) The proceeds in any financial year of any such tax levied in accordance with the provisions of clause (1) shall be-

(a) Collected by the Government of India and the States;

(b) Appropriated by the Government of India and the States,

In accordance with such principles of collection and appropriation as may be formulated by Parliament by law.”

3. Amendment of article 270. – In article 270 of the Constitution, in clause (1), for the words and figures “articles 268 and 269”, the words, figures and letter “articles 268, 268A and 269” shall be substituted.

4. Amendment of Seventh Schedule. – In the Seventh Schedule to the Constitution, in List I-Union List, after entry 92B, the following entry shall be inserted, namely:-

“92C. Taxes on services.”


Secy. to the Govt. of India.

The Eighty-Eighth Amendment to the Constitution Act of 2003:

Currently, neither entry in the Union List nor the State List in the Constitution’s Seventh Schedule clearly mentions “taxes on services.” For any other things not specified in List Il or List III, including any tax not mentioned in either of those Lists, Parliament has the only competence to create legislation under entry 97 of the Union List.

According to this, amending the Constitution entails:

(A) improving the Constitution by correcting mistakes,
(B) making adjustments to the Constitution that do not undermine it, but alter its fundamental elements.

It takes consequences on the date given by the Central Government in a notification published in the Official Gazette.

  • The addition of a new article (268A) will be introduced after article 268 of the Constitution:
  • The government of India shall impose service taxes, which will be appropriated and then collected by the Indian government and the states in the order given in this subsection.
  • The profits of any such tax charged in line with the provisions of section in any financial year shall be collected and allocated by the Indian government and states.
  • Article 270 is amended – in clause (1) of Article 270 of the Constitution, the words and figures “articles 268 and 269” shall be replaced with the words, figures, and letters “articles 268, 268A, and 269.”
  • Seventh Schedule Amendment: The following entry shall be put after entry 92B in List I-Union List of the Constitution’s Seventh Schedule “Services taxes” (92C).
  • The proposed modification would contribute to a considerable increase in state revenues under the proposed law, as well as pave the way for the future inclusion of services under the ambit of state-level VAT.

Service tax will be added to the Union List due to the modification. On March 7, 2003, a Constitution (Eighty-eighth Amendment) Bill was introduced, which sought to amend the Constitution to include service tax as a specific entry in the union list and develop principles for determining the modalities of levying service tax by the Union Government and collecting the proceeds by the Central and State Governments.


So in conclusion, the government proposed a constitution in 2003 that would allow the centre to levy a formal tax on services and allow states to collect and appropriate the proceeds. Service tax will be added to the Union List due to the modification. The service tax that is given by the union was collected by the union and the states. The central government has consistently advocated that services be taxed through expert committees. It is suggested to alter the Constitution to provide an adequate tax on services as a particular entry in the Union List.
(i) insert a new article, namely article 268A, and 
(ii) significant adjustment to article 270 to enable Parliament to create by law criteria for determining the modalities of levying a tax on services.


Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.


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In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

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