The proposed Goods and Services Tax would aggravate the already high degree of inequality in the country, and would inevitably curb the fiscal autonomy of state governments significantly. Contrary to the government's claims, the implementation of the GST would not automatically enhance growth rate, reduce inflation or improve tax compliance. The calculations of the revenue neutral rates depend on various assumptions. Different states should be allowed to set their own state-GST rates with provisions for an entry tax. More emphasis should be put on direct taxes rather than the GST for improving India's abysmally low tax to gross domestic product ratio.