Evaluating the Impact of GST Implementation on the Financial Performance of Indian Automobile Companies

The introduction of the Goods and Services Tax (GST) in India on July 1, 2017, marked a significant reform in the country’s indirect taxation system. This study aims to evaluate the financial impact of GST implementation on selected Indian automobile companies by comparing key financial indicators before and after the GST rollout. Using a paired samples t-test methodology, the research analyzes variables such as Revenue, Profit Before Tax (PBT), Profit After Tax (PAT), Total Assets, Inventory Turnover, Tax Expenditure, Investment, and Current Ratio over a ten-year period from 2012 to 2022. The findings reveal a statistically significant impact on Revenue, Total Assets, and Tax Expenditure following the implementation of GST, suggesting improvements in sales, capital growth, and tax management within the automobile sector. However, Profit Before Tax (PBT), Profit After Tax (PAT), Investment, Inventory Turnover, and Current Ratio showed no significant changes, indicating that GST did not uniformly affect all financial parameters. This suggests that while GST has brought improvements in certain aspects of financial performance, challenges remain in areas such as profitability, liquidity management, and inventory efficiency. In conclusion, while GST has enhanced financial efficiency in key areas of the automobile sector, further adjustments are needed to address its impact on liquidity and operational efficiency. This research provides valuable insights for policymakers, investors, and industry stakeholders on the varied effects of tax reforms across different sectors. Keywords: Goods and Services Tax (GST), Financial Performance, Indian Automobile Industry, Pre and Post GST Comparison