The Indian Constitution has divided taxation powers between the Centre and states quite neatly, in general. However, the division of taxation powers on goods and services is not so clear-cut.
Excise duty on the manufacture of goods was placed in the Centre’s domain, while sales tax on manufactured and other goods was assigned to states. Excise duty on alcoholic preparations was given to states. Inter-state sales fell between two stools. The Constitution had to be amended to assign legislative powers thereon to the Centre, but the authority to fix rates and collect taxes was assigned to the originating states.
The concept of services as value-creators, like goods, did not exist at that time. Very few services, for example, entertainment, electricity, etc, were consciously recognised, and they were broadly assigned to states. Services as a class had to be invented in the 1990s by interpreting the residual Entry 97 in the Union List, which led to the Centre assuming the authority to tax all services.