Abstract The implementation of the Goods and Services Tax (GST) in India in 2017 marked a transformative shift in the country’s fiscal system. While GST aimed to simplify taxation and promote economic integration, its implications for the informal sector raise critical sociological concerns. This study examines the impact of GST on small enterprises with a focus on social equity, livelihood transformation, and structural inequalities. Using primary data collected from 50 respondents, the study reveals that GST has resulted in partial formalization accompanied by increased compliance burdens and digital exclusion. The findings suggest that while GST enhances transparency, it also reproduces inequalities among marginalized groups. The paper concludes that inclusive policy measures are necessary to ensure equitable outcomes of economic reforms. Keywords: GST, informal sector, social equity, MSMEs, formalization. 1.Introduction India’s economy is characterized by a dominant informal sector that employs nearly 90% of its workforce. This sector includes street vendors, small traders, and micro-enterprises operating outside formal regulatory systems. The introduction of GST in 2017 aimed to unify indirect taxes, enhance compliance, and promote formalization. From a sociological perspective, GST represents not only an economic reform but also a structural transformation affecting work, livelihoods, and social relations. This study explores how GST has influenced the informal sector and examines whether it has contributed to social equity or intensified inequalities. 2.Objectives of the Study 1. To analyze the impact of GST on informal sector enterprises 2. To examine issues of social equity and inequality 3. To understand the lived experiences of small business owners 4. To explore coping mechanisms adopted by informal sector actors 3.Review of Literature Existing studies indicate that GST has increased compliance costs for MSMEs, making it difficult for small businesses to adapt to new regulatory frameworks (Mukherjee, 2019). Reports suggest that compliance requirements are disproportionately burdensome for small enterprises compared to large firms (National Council of Applied Economic Research NCAER, 2018). Technological challenges also play a significant role. Many small traders struggle with digital filing systems, highlighting the persistence of the digital divide (Confederation of Indian Industry CII, 2018; Castells, 2000). Further, GST has led to a decline in profitability for small traders due to increased tax liability and compliance costs (Kumar, 2019). Studies also note the emergence of intermediaries such as accountants and consultants, which adds to the financial burden (Khera, 2020). Sociological perspectives emphasize that economic reforms often produce uneven development, reinforcing existing inequalities rather than eliminating them (Sen, 1999). 4.Theoretical Framework This study is based on three major sociological perspectives: Structural Functionalism views GST as a mechanism promoting economic integration and efficiency. Conflict Theory highlights how GST benefits large corporations while marginalizing small enterprises. Informal Economy Theory explains the persistence of informal practices within formal regulatory frameworks. 5.Methodology Research Design This study adopts a mixed-method approach combining quantitative and qualitative data. Sample The study includes 50 respondents comprising small traders, street vendors, and micro-entrepreneurs. Data Collection Data were collected using: • Structured questionnaires • In-depth interviews • Field observations Limitations The study is limited by sample size and regional scope. 6.Results and Analysis Socio-Economic Profile Most respondents belonged to lower-middle-income groups with limited access to financial and technological resources. Awareness of GST Only 32% of respondents had full knowledge of GST procedures, while others relied on intermediaries. Digital Divide A majority of respondents faced difficulties in using online GST platforms, indicating technological exclusion. Economic Impact Nearly half of the respondents reported a decline in income due to increased compliance costs and tax burdens. Employment Impact Some businesses reduced their workforce to manage increased operational costs. Gender Dimension Women entrepreneurs faced additional challenges due to limited digital access and mobility constraints. Discussion The findings indicate that GST has led to partial formalization but has not eliminated informal practices. Instead, it has created hybrid systems where formal and informal practices coexist. From a conflict perspective, GST has reinforced class inequalities by favoring large firms with greater resources. The digital divide has further excluded marginalized groups, highlighting the importance of technological accessibility. 7.Findings 1. GST has resulted in uneven formalization 2. Compliance costs disproportionately affect small businesses 3. Digital inequality is a major barrier 4. Informal practices continue in modified forms 5. Social inequalities have intensified Suggestions 1. Simplify GST procedures for small businesses 2. Provide digital literacy programs 3. Increase exemption thresholds 4. Offer financial support to MSMEs 5. Promote inclusive policy frameworks Conclusion GST represents a significant economic reform with complex sociological implications. While it has improved transparency and efficiency, it has also created new challenges for the informal sector. The study concludes that without inclusive measures, GST may continue to reinforce existing inequalities rather than promote social equity References AIMO. (2019). Impact of GST on MSMEs in India. All India Manufacturers’ Organisation. Castells, M. (2000). The rise of the network society (2nd ed.). Blackwell Publishers. Confederation of Indian Industry. (2018). GST implementation and its impact on industry. Khera, R. (2020). Economic reforms and the informal sector in India. Oxford University Press. Kumar, R. (2019). GST and its economic implications in India. Oxford University Press. Mukherjee, A. (2019). GST reform and small businesses in India. ICRIER. National Council of Applied Economic Research. (2018). Economic impact of GST on small enterprises. Sen, A. (1999). Development as freedom. Oxford University Press. Weber, M. (1978). 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M. Sophia Sharon (Wed,) studied this question.