Mismanaging GST

It is almost certain that the Centre will have its way on the goods and services tax (GST) compensation issue because 21 states and Union Territories have backed the offer for a Rs 97,000-crore Reserve Bank of India (RBI) window. Even if the plan comes up for voting in the GST Council, the Centre’s “victory” is a near-certainty, but it will be at a considerable cost because the lack of a consensus is bound to worsen the already fragile Centre-state relations. According to estimates, the revenue is likely to fall short by Rs 3 trillion in the current fiscal year.