Goods and Services Tax and Its Impact on Small and Medium Enterprises

Abstract

The introduction of the Goods and Services Tax has marked a significant reform in the indirect tax system, aiming to create a unified and transparent tax structure. This impact of Goods and Services Tax on Small and Medium Enterprises, which play a vital role in economic growth, employment generation, and industrial development. how GST has affected the operational, financial, and compliance aspects of SMEs, including tax burden, input tax credit, pricing, and working capital management. Using secondary data and empirical evidence from existing studies, the findings indicate that while GST has simplified the tax structure and improved market access for SMEs, it has also increased compliance costs and administrative challenges, particularly for smaller firms with limited resources. The opportunities and challenges associated with GST implementation and emphasizes the need for policy support, technological assistance, and awareness programs to enhance GST compliance and improve the overall performance of SMEs in the post-GST regime.