Neelkanth Mishra of Credit Suisse said GST introduced uncertainty on several fiscal fronts. Taxes subsumed under GST were to contribute nearly Rs 10.6 lakh crore in FY18 (36 percent of India's total taxes), he added.
With some assumptions, he estimates centre-state split at 45-55.
Even adjusted for the compensation pool, a 50-50 CGST-SGST split may distort tax sharing, according to him.
As compensation payments will be made to the states every two months and on a fixed growth assumption, most of the volatility, if any, would be faced by the centre, he feels.
General government spending, yields and spreads could thus see some volatility, according to Mishra.
Equity benchmarks started off last day of the week on a negative note, dragged by profit booking and weak global cues.
The 30-share BSE Sensex was down 39.24 points at 31,330.10 and the 50-share NSE Nifty fell 17.25 points to 9,657.30. About 602 shares advanced against 479 declining shares on the BSE.
Tata Steel, Tata Motors, Wipro, ICICI Bank, HDFC Bank, IndusInd Bank and Infosys were under pressure while Lupin gained over a percent in early trade followed by Bharti Airtel, Cipla and Eicher Motors.
Tata Teleservices gained 5 percent. JBM Auto was up on entering into electric bus segment.
MEP Infra, Balaji Amines, Prakash Industries, Speciality Restaurants, IDFC, IDFC Bank, Shriram City Union and InterGlobe Aviation were midcap gainers while RBL Bank, Bhushan Steel and Jaypee Infra were losers.
GM Breweries fell 3 percent on weak earnings in Q1.
Stocks in Asia were softer following the weaker close stateside and as global bond yields rose overnight. The Nikkei 225 declined 0.14 percent and the Kospi was off 0.23 percent.
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