The Union finance ministry has rejected the changes in the goods and services tax (GST) demanded by state governments, as echoed in the empowered committee of state finance ministers.
The states had demanded that the Union government give up the proposed GST council with the Union finance minister as its chairman. The states also want to do away with the dispute settlement body, a mechanism meant to resolve the many taxation issues between the states and the Centre.
The Centre has done well to reject both demands. For in the fractious universe of Indian states, few, if any decisions, can be made if they keep their individual interests before that of the tax system, and hence the country, as a whole.
If the GST council and the dispute settlement body, the keystone in the GST arch, are taken away, then the system that remains would be GST in name only. There would be no substance in it.