The impact of Goods and Services Tax (GST) on consumption and household savings can be analyzed as follows: 1. Simplification: GST brought about the unification of multiple indirect taxes under a single tax system. This simplification reduced the compliance burden on businesses, leading to increased efficiency and lower prices for consumers. 2. Reduced tax cascading: The removal of cascading taxes under GST (where tax is levied on tax) reduced the overall tax burden on goods and services. This led to lower prices, resulting in increased consumption. 3. Increased competition: GST facilitated a level playing field for businesses by removing entry barriers across states. This resulted in increased competition, leading to lower prices and more choices for consumers. 4. Input tax credit: GST introduced the concept of input tax credit, allowing businesses to claim credit for taxes paid on inputs. This helped reduce their costs, leading to lower prices for consumers. 5. Boost to savings: The reduction in overall tax burden and lower prices due to GST resulted in increased disposable income for households. This extra income could be saved or used for other consumption purposes. 6. Lower inflation: The streamlined tax system and reduced tax burden under GST helped control inflation. This stability in prices positively impacted household budgets, resulting in increased savings. Overall, the simplification, reduced tax burden, increased competition, and lower inflation due to GST have had a positive impact on consumption and household savings.