A Study of Impact of GST on Micro, Small and Medium Enterprise A Critical Analysis

Abstract

India started liberalizing its economy in 1992. Economy was opened to foreign corporate world. Domestic producers were facing tough time to compete the international market in respect of high cost of product. Indirect tax structure, multicity of tax at various phases were  the ultimate reason for high prices. Rationalization of indirect tax structure paved the way to overcome one aspect to compete in open market. The main aim of this system is to abolish the all indirect taxes and only GST would be levied. Very thought of one nation one tax GST is described as one tax for one nation. It has been long pending problem to streamline all types of tax and put into effect a single taxation system. GST is a tax that needs to pay on supply of goods and services. Any person who is offering goods and services is liable to pay GST. This paper is humble attempt to  highlights the impact of GST on micro, small and medium enterprises. MSMEs are major part in the Indian economy. Today we have around 15.64 lakhs MSMEs in India (source: www.indiamicrofinance.com/micro-small-enterprises-india com. Earlier, any manufacturer with turnover 1.5crore or less was not required to comply excise duty. The study discusses the pros and cons  impact of GST on MSMEs sector’s will also bring in many positive effect such as easy process of a availing input tax credit, single point tax etc. Govt. has also taken sustained initiatives in order to educate MSMEs about the various provisions and requirements under GST for MSMEs through the seminars, training sessions, etc. GST covers many problems about the MSMEs sector. GST provide the some beneficial facilities to the MSMEs.