GST Adoption and Its Effects on Small and Medium Enterprises

Abstract

The Goods and Services Tax (GST) was introduced in India to simplify and unify the indirect tax system and to promote ease of doing business. While GST aims to improve tax transparency and efficiency, Micro, Small and Medium Enterprises (MSMEs) face several challenges in complying with the new tax regime. This study examines the GST compliance issues faced by MSME entrepreneurs in Palakkad District and analyses their impact on business operations. Primary data were collected from 103 MSME entrepreneurs using a structured questionnaire, supported by secondary sources such as journals, reports, and government publications. The study employs percentage analysis and One-Way ANOVA to evaluate compliance difficulties and variations across socio-economic groups. The findings reveal that MSMEs face significant challenges related to return filing, technological infrastructure, and awareness of GST provisions. The study highlights the need for simplified procedures, enhanced training, and supportive policy measures to improve GST compliance and ensure sustainable growth of MSMEs.