GST Reforms in the MSME Sector in India: An Empirical Study of Compliance, Digitalization and Business Performance

Abstract

The present study empirically examines the impact of GST reforms on MSMEs, particularly in relation to tax compliance, digitalization, business formalization, input tax credit, working capital and business performance. The study adopts a descriptive and analytical research design. For the purpose of demonstrating the empirical methodology, an illustrative sample of 200 MSME respondents is considered. Data are analyzed using percentage analysis, weighted mean analysis and chi-square and one-sample t-tests. The findings indicate that GST reforms have contributed positively to formalization, digital accounting, transparency and access to wider markets. However, compliance costs, dependence on tax professionals, technological difficulties and working-capital concerns remain important challenges, especially for micro enterprises. The study suggests that future GST reforms should emphasize simplified compliance, greater taxpayer education, affordable digital tools, multilingual assistance and predictable regulatory procedures.

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