The term “intra-state trade” is used to describe trade between two different states. This type of trade is considered excessive compared to international trade. State laws also affect intra-state trade. In this article, we’ll explore the concept of intra-state trade and the various rules that govern it.
Art. 301 of the Australian Constitution restricts interstate trade
The Australian Constitution protects the freedom to trade in a state by prohibiting restrictions on the flow of goods and services between states. The corresponding article is Article 301. This article is similar to Section 92 of the constitution but is more expansive. In practice, it is difficult to know which part of the constitution is affecting interstate trade.
The term “absolute free” is used in Article 301 of the Australian Constitution. It prohibits the central government from regulating trade between states. However, this does not mean that all states must allow interstate trade. The Australian Constitution also protects intrastate trade.
While a state may prohibit interstate trade in goods and services, it may not limit interstate trade. For instance, a state may prohibit a toll road if it causes harm to interstate commerce. If a toll road is a purely commercial enterprise, it would not be a violation of Article 301.
Taxes levied on intra-state trade
Taxes levied on intra state trade are collected from the parties who carry out the supply of goods and services within a state. This taxation applies to supplies where the provider’s position and place are the same as those of the buyer. The seller must collect CGST and SGST from the buyer and deposit them with the Government of the State or the Central Government.
CGST and SGST are two types of tax collected by the seller from the buyer of goods and services. These taxes apply to goods and services supplied within the state or the union territory. For inter-state supplies, the seller must collect SGST and CGST from the buyer. This tax is known as the Integrated Goods and Services Tax (IGST).
A state may levy a tax on an intra-state supply if the ingredients used in it are located in more than one state. This connection is known as the territorial nexus theory of taxation. However, a territorial nexus is only effective if the connection is real.
Impact of state laws on intra-state trade
The Commerce Clause limits the power of states to regulate economic activities within their boundaries. Generally, a state may not prohibit commerce that is “directly competitive” with interstate commerce. However, there are cases in which state laws may inhibit intra-state trade. For example, in So. Pacific Co. v. Arizona, the court held that an Arizona law prohibiting trains with more than seventy freight cars violated the Commerce Clause.
The Wabash decision cited this case as precedent. The Court concluded that Congress had the power to regulate commerce but did not have the power to restrict the interstate trade between states. This resulted in a vast increase in the overlap of power between Congress and states. The court’s ruling, however, left the states free to regulate commerce within their own borders, as long as the laws did not hinder interstate commerce in a substantial way.
The Parker decision has left open the possibility of imposing anticompetitive measures by private parties. A railroad cartel for instance, charges noncompetitive interstate transportation rates. States can also restrict free trade by authorizing private parties to engage in anticompetitive behavior. They may also legalize horizontal price fixing and mergers resulting in monopoly.