1% tax rate above GST to help states overcome the revenue loss may hurt the Make

in India campaign of the Govt. of India. This will restrict interstate movement of
goods as explained by Chief Economic Advisor Arvind Subramanium. Think of a
movement of goods from Gujarat to Tamil Nadu. Now by the time goods reach Tamil
Nadu, the tax rate is around 4-5% as there is 1% tax per state. This makes it to
import goods from Bangkok more attractive than to get it done domestically from a
state like Gujarat.