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

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.