• The constitutional body under Article 263.

• The President can establish a council through an order and define the duties, organization and procedure.
• It was set up for the first time in 1990 through a Presidential order as per the recommendations of the Sarkaria Commission (on Inter-State Relations).

• If the President believes it would benefit the public interest, a council may be formed
  • a) To enquire and advise upon inter-state disputes (Complimentary to SC’s jurisdiction under Art.131).
  • b) Investigating & discussing subjects in which states or the Centre and the states have a common interest.
  • c) Recommending on any matter for better coordination of policy & action.
• Scope: The Council can deal with any controversy whether legal or non-legal but its decisions are advisory and not binding.

• Establishment of a permanent Inter-State Council under Article 263 of the Constitution.
• To differentiate the Inter-State Council from other bodies established under the same Article 263, known as the Inter-Governmental Council (IGC).
• The IGC’s responsibilities, excluding socio-economic planning and development, should encompass those outlined in clauses (b) and (c) of Article 263.

• PM as Chairman + CMs of all states + CMs of all UTs having legislative assemblies + Administrators of all UTs not having Legislative Assemblies + Governors of states under President’s Rule + Six Central Cabinet Ministers including Home Minister (Nominated by PM) + Five ministers of cabinet rank/ Minister of State (Independent Charge) nominated by PM are permanent invitees.

• The council may meet at least thrice in a year.
• All questions are decided by consensus.

• Set up in 1996 for continuous consultation and processing of matters for the consideration of the council.
• Members of the Committee: Union Home Minister as Chairman + Five Union Cabinet Ministers + Nine CMs.
• The Council is assisted by the Inter-State Council Secretariat (Set up in 1991). It is headed by Secretary to the Government of India.
• Since 2011, it is also functioning as the secretariat of the Zonal Councils.

• Council set up under Article 263, the President has instituted the following councils to provide recommendations for enhanced coordination of policy and action:

• Central Council of Health.
• Central Council of Local Government and Urban Development.
• Four Regional Councils for Sales Tax for the Northern, Eastern, Western and Southern Zones.
• Council set up under the Acts of Parliament:
• Central Council of Indian Medicine.
• Central Council of Homoeopathy.

• Trade, commerce, and intercourse throughout the country shall be free.
• This freedom is applicable to both inter-state and intra-state trade and commerce.

Provides for restrictions:

• Parliament can impose restrictions on the above freedom in public interest.
• Parliament cannot discriminate between states except in the case of scarcity of goods in any part of India.

• State legislatures can impose restrictions within that state in public interest.
• For such a bill previous sanction of the President is required.
• States cannot discriminate between states.

• States can impose any tax on goods imported from another state or UT if similar goods are manufactured in that state.
• This provision prohibits the imposition of discriminatory taxes by the state.

• The freedom (under Art.301) is subject to nationalization laws.
• Parliament or state law can provide a monopoly in favor of the Centre or State.
• Such laws can exclude citizens or others completely or partially from carrying such trade.

• Parliament can appoint an appropriate authority for carrying out the purposes of the above provisions relating to the freedom of trade, commerce and intercourse and restrictions on it.