Interstate Commerce

Posted in Finance, Accounting and Economics Terms, Total Reads: 294
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Definition: Interstate Commerce

The commercial trade or transfer of goods, services or money from one state to another is called Interstate Commerce. This transportation of goods and services from one state to another are regulated by certain federal laws. It is strictly within the geographical boundaries of the country.


e.g. transportation of coal mined from coal fields in Jharkhand to Power plants in Gujarat.


State governments can apply certain taxes, duties on import of certain goods from other states to protect its own artisans, farmers, etc.

The interest of the Interstate commerce must be local and only those goods should be regulated that are peculiar to that region. It must not be a burden to transport goods and services interstate and a free trade approach amongst states should be followed.


Introduction of GST would have a great impact on interstate commerce with a uniform indirect taxes to be charges rather than every state having its own certain taxes and duties. Although, it may also lead to loss of taxation revenue for states which need to be compensated for.

 

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