- Inter-state Trade:
- Transformed India into one unified common market.
- Removed inter-state check posts (Entry Tax).
- Reduced compliance scrutiny for inter-state movement of goods.
- Facilitated seamless movement of goods across states.
- Federal Fiscal Relations:
- States gave up right to impose sales tax, Centre gave up excise/service tax.
- Both get a share of unified GST collected nationally.
- GST Council (Centre and State ministers) makes joint decisions.
- This fostered “cooperative federalism”.
- GST Compensation Cess was introduced to address state revenue shortfalls.
- Supreme Court ruled GST Council recommendations are recommendatory, not binding.