Digital Transformation under GST: Assessing Digital Divide and Capacity Challenges in India

The study examined the impact of digitalization on GST compliance and assessed the challenges arising from the digital divide and capacity gaps among taxpayers. The findings show that digital technologies have improved GST administration by making tax processes more efficient, transparent, and accessible. Digital literacy, internet accessibility, and technological infrastructure were found to have a significant positive influence on GST compliance. However, many small businesses and rural taxpayers continue to face challenges due to limited digital skills, poor internet connectivity, and lack of technical training. These barriers increase dependence on external consultants and reduce the effectiveness of technology adoption. The study concludes that while digitalization has strengthened GST compliance in India, greater efforts are needed to improve digital literacy, expand internet infrastructure, and provide continuous training support. Addressing these challenges will help reduce the digital divide and ensure more inclusive and effective participation in the GST system.

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