GST and Consumer Welfare: Unpacking The GST Impact on Indian Consumers

Abstract

Consumers are the backbone of any economy and bear the final cost of goods and services, including the taxes levied across the supply chain. Before the introduction of the Goods and Services Tax (GST) regime, various indirect taxes were levied at different stages of the supply chain, resulting in cascading taxes and inflating the final prices borne by consumers. The GST regime aims to streamline and simplify the indirect tax structure and reduce the burden on consumers. GST has subsumed multiple indirect taxes into a single framework, thereby offering various advantages such as reduced cascading effects, enhanced transparency, and improved efficiency in interstate commerce. It empowered consumers with a clearer understanding of the taxes levied on their purchases and facilitating informed decision-making. However, this revolutionized change in the indirect tax regime has necessitated a deeper understanding of its implications for consumer rights and protections. Although GST does not explicitly deal with consumer rights, its impact on consumer welfare is undeniable. Despite this, the Consumer Protection Act of 2019 addressed new issues with e-commerce and online transactions while reiterating consumer rights in the digital age. This paper explores the interplay between consumer rights, GST regulations, and emerging consumer protection mechanisms in India. It examines key facets such as anti-profiteering measures, e-commerce regulations, and the treatment of service charges under GST. The paper aims to highlight the role of GST in streamlining taxation and fostering consumer welfare while advocating for a transparent and equitable market environment. By upholding principles of fairness, transparency, and accountability, GST can catalyze inclusive growth and prosperity in the Indian economy, aligning with the vision of “Viksit Bharat 2047.”