The introduction of Goods and Services Tax on 1 st of July 2017 has introduced a major shift in the taxation structure of India as it has consolidated indirect taxes from multi structure. This revised the whole of the taxing system and provided a new meaning to the federal structure and state. Effect on Tax System:

1. It make tax structure becomes simple.

– GST, in fact, replaced all the related structures of indirect taxes in version of Value Added Tax (VAT), Excise Duty and Service Tax and thereby did away with tax cascading.
2. Ease of doing business:  The removal of all hassles of inter-state trade is provided for by a uniformity in taxation to make interstate smooth and enhance the efficiency of business in general.
3. Revenue increased transparency:

The GST regime besides encouraging digitized filings and input tax credit mechanisms discourages tax evasion. 4. Broader Tax Base:

This implementation of GST made the so called legitimate businesses to come under the tax bracket thus enhancing the collection of revenue. Impact on Federal-State Relations:

1. Cooperative Federalism:

The GST Council has representatives of the Centre and the states to ensure that tax rate and policies decisions mostly are arrived through consultations. 2. Revenue Issues:

Centre no doubt compensated for revenue losses which states incurred during first few years of GST,but not all of them. 3. Fiscal Autonomy Issues:

And finally, states had to lose some of their taxation powers that led to debates on lose of more revenue powers.
Conclusion:

While GST has aimed at bringing about efficiency in Indian Tax system, inclusiveness, transparency, integrity besides bringing balance in Centre-state revenue share, it has brought out issues related to vertical balance in Centre-state relations, the role of cooperative federalism emerged as critical.