What question did this study set out to answer?

The central aim is to assess the impact of GST on Indian businesses, including both advantages and challenges encountered since implementation.

February 27, 2026Open Access

Impact of Goods and Services Tax (GST) on Indian Businesses

Key Points

The central aim is to assess the impact of GST on Indian businesses, including both advantages and challenges encountered since implementation.
Analysis of the economic reform introduced by the GST in 2017
Evaluation of its effects across various industries
Examination of compliance challenges faced by SMEs
Consideration of evolving reforms like e-invoicing and QRMP
Reduction in logistics costs for corporates
Improved interstate trade efficiency
Compliance difficulties for small and medium enterprises
Need for reforms to enhance GST efficiency in the future

Abstract

The introduction of the Goods and Services Tax (GST) in India through the 101st ConstitutionalAmendment Act of 2016 marked one of the country’s most significant economic reforms sinceindependence. Officially implemented on July 1, 2017, GST replaced a fragmented tax structure of exciseduty, service tax, VAT, octroi, and entry tax with a single unified system. By creating “One Nation, OneTax, One Market,” GST streamlined compliance, widened the tax base and increased transparency. Its effects have been profound across multiple industries—while corporates benefitted fromreduced logistics costs and seamless interstate trade, small and medium enterprises (SMEs) facedchallenges in adapting to compliance norms and refund delays. Over time, reforms such as e-invoicing,QRMP, and sector-specific adjustments have shaped GST into a dynamic system. This paper critically examines the impact of GST on Indian businesses, highlighting benefits,limitations, and evolving reforms, and provides suggestions for enhancing its efficiency under GST 2.0.

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