A Comparative Study of Tax Compliance Before and After GST with Special Reference to MSMEs and Its Impact on Essential and Non-Essential Goods in India.

The Goods and Services Tax (GST) has transformed India’s indirect tax system by replacing various state and central taxes with a single framework, aiming to simplify the tax structure and improve tax compliance. This study focuses on a comparative analysis of tax compliance pre and post GST, focusing on the experiences of small taxpayers and Micro, Small, and Medium Enterprises (MSMEs) on GST and analyzing the impact of GST on essential and non-essential goods. Early studies on compliance were primarily focused on individuals and income tax, whereas recent comprehensive reviews of the literature indicate that groups of taxpayers, such as small businesses, and compliance with other tax types, such as consumption taxes, remain underexplored. Prior to GST, the tax system in India was characterized by a complex, multi-layered, and fragmented indirect tax system. With the introduction of the Goods and Services Tax (GST) on July 1, 2017, the implementation of the Goods and Services Tax (GST) in India on July 1, 2017, marked a shift from a fragmented, multi-layered indirect tax system to a unified, digital-first regime. This transformation aimed to enhance transparency, streamline procedures, and reduce tax evasion, resulting in significant changes to tax compliance. The study explores how GST has influenced the compliance behavior of MSMEs, including changes in registration, return filing, and overall tax awareness. It also analyzes the challenges faced by small taxpayers, such as increased compliance requirements, digital literacy issues, and working capital pressures. The study also explores the differential tax treatment of essential and non-essential goods and their implications on pricing and consumption. Furthermore, the research examines the differential impact of GST on essential and non-essential goods, focusing on pricing, tax rates, and consumer demand patterns.