The 2017 Goods and Services Tax (GST) was one of most ambitious tax reforms introduced in India. This paper documents the context in which the GST was introduced – particularly the regional disparities in economic capacity, discusses design challenges in developing the GST,and the basic contours of the newly introduced GST. The paper advances two arguments. First,the he efficacy of India’s tax reform must be assessed in the context of federal transfers and larger spillovers of the GST to the economy. Further, there is a compelling necessity to review and recalibrate the entire gamut (and not piecemeal) of federal relations – tax, expenditure and transfers. This is critical to ensure the stability and predictability needed to ensure that India’s state driven growth blossoms and attains full fruition.