Advantages of GST for Citizens and the Economy

The Impact of GST on the Average Citizen of India

GST has been an impact to all citizens of India which is why it is important to see how GST has influenced the most i.e. whether it is most on the consumer, the average person or at the taxpayer.

The advantages of GST can be seen as follows:

• GST is a tax which is imposed on the value addition of goods and services, ultimately borne by the final consumer. GST has led to a reduction in the overall tax burden on goods for the common man. Since 22nd September 2025, most goods and services fall under just two main slabs of 5% and 18% — compared with a combined burden of 25% to 30% before GST — with only select sin and luxury goods attracting 40%. Under Goods and Service Tax (GST) this is the biggest benefit for the common man.
• Small suppliers whose aggregate turnover is up to Rs. 40 lakh for goods or Rs. 20 lakh for services in the financial year are exempted from GST registration in India. The limits for special category states are Rs. 20 lakh and Rs. 10 lakh respectively. But taxpayers who make inter-state supplies or who pay tax on a reverse charge basis must register regardless of turnover.
• Earlier, on most goods rate of indirect tax applicable was too high like on consumer electronics, beauty products, none- luxury automobiles etc. Around 12.5% of Excise duty and Value Added Tax (VAT) of about 12.5%-15% depending upon the state were charged. Consumers were paying multiple taxes, but with the coming of GST, they are supposed to pay only single tax, due to which it is easy for them to understand how much amount they are paying on taxes.
• As compared to other taxes, GST is easier to administer. It is easy to understand for the common man and for the government appointed officials. It has removed the cascading effect of all other taxes which were levied by the Central and State government.
• GST has made goods competitive in the domestic as well as international market. Consumers get better goods and services at fairer rates, which supports consumption and the Indian economy.
• Under GST, all tobacco and tobacco related products are subject to the highest rate of taxation along with additional levies, in line with their treatment as sin goods under the 2025 rate structure.
• It is important to note that following goods and commodities will not fall under GST:
  • Petrol and Petroleum products.
  • Natural gas.
  • Alcohol for human consumption.
  • Aviation turbine fuel.
  • Electricity.
  • High-speed diesel.
• Under GST, full input tax credit is available on capital goods, which was restricted under the earlier regime. This lowered the effective cost of capital goods by an estimated 12-14% and has supported investment and growth.
• GST has increased the revenue of the government by widening the tax base and improving tax compliance — monthly GST collections now regularly cross Rs. 2 lakh crore, roughly double the levels of the early GST years.
• GST prevents the cascading of taxes as it provides a comprehensive input tax credit mechanism across the entire supply chain. The seamless availability of Input Tax Credit across goods or services enables a smooth streamlining of business operations.

What is GSTIN?

Before GST, any dealer who was registered under state VAT law was issued a unique TIN number by the respective state authorities. Similarly, an individual providing services was assigned a Service Tax registration number by the erstwhile Central Board of Excise and Customs.

Under the GST regime, every taxpayer in India uses a single platform — gst.gov.in — and is assigned registration by a common authority. All the businesses registered under GST are assigned a unique Goods and Services Tax Identification Number (GSTIN); more than 1.5 crore taxpayers are registered today. Under GST, each taxpayer is given a state-wise, PAN-based 15-digit Goods and Services Taxpayer identification number (GSTIN).

The breakup of the proposed GST Identification Number is as follows:

• The first two digits of this number represent the state code, which is as per Indian census 2011.
• The next ten digits are the Permanent Account Number (PAN) of the taxpayer.
• The 13th digit is assigned based on the number of registrations done within the state.
• The 14th digit is Z by default.
• The last digit may be an alphabet or a number, it is basically a check code.

GSTIN and GSTN are both different terms. GSTN is Goods and Services Tax Network, the organisation set up to manage the entire IT system of the GST portal, which is the mother database for GST. The government uses this portal to track GST transactions and provide taxpayers with all services – from maintaining all tax details to registration and the filing of taxes.

Procedure for Filing GST Taxes

• The taxpayer must upload the GSTR-1 statement of outward supplies, either directly or through the offline tool on the GST common portal, by the 11th of the succeeding month (quarterly filers under the QRMP scheme can use the Invoice Furnishing Facility).
• Businesses with aggregate turnover above Rs. 5 crore must first report their B2B invoices to the Invoice Registration Portal (e-invoicing) to obtain an Invoice Reference Number.
• The invoices uploaded by suppliers auto-populate the recipient's GSTR-2A (dynamic) and GSTR-2B (static) statements on the common portal.
• Input tax credit can be claimed only for invoices appearing in GSTR-2B, so purchasing taxpayers should reconcile their purchase registers with GSTR-2B each period.
• Missing supply invoices should be followed up with counter-party suppliers so they are reported in the suppliers' GSTR-1 of a subsequent period.
• By using the offline facility or the online common portal, taxpayers finalise their GSTR-3B summary return.
• The tax shown in GSTR-3B is payable by the 20th of the succeeding month (or the 22nd/24th of the month following the quarter under QRMP).
• In the GSTR-3B return, the taxpayer debits the electronic cash ledger and credit ledger for payment and submits the return; an annual return in GSTR-9 consolidates the year.