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Stream/Area:
-
Subject:
-
Paper ID:
10.55041/IJSREM.GSTCOS043
Volume:
10 |
7 |
Jul 2026
Pages:
1-5
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Department of Management Studies,
B. V. Raju Institute of Technology, Narsapur, Medak District, Telangana-502 313, India.
Department of Management Studies,
B. V. Raju Institute of Technology, Narsapur, Medak District, Telangana-502 313, India.
Department of Management Studies,
B. V. Raju Institute of Technology, Narsapur, Medak District, Telangana-502 313, India.
One of the most profound tax reform measures in India's economic history is the Goods and Services Tax (GST), which seeks to eliminate internal trade barriers and establish a single national market. Its macro-level fiscal impacts are extensively researched but its sub-national localized impact on micro, small and medium enterprises (MSMEs) in a highly progressive economy such as Telangana requires a detailed academic study. This study is an empirical study that examines, based on the primary data, how the GST regime has impacted MSMEs in Telangana from various operational and socioeconomic perspectives, particularly on the compliance cost, digital readiness, credit access, and competitiveness of the market. The study uses a mixed-methods approach, leveraging secondary fiscal data and a primary survey of 150 MSMEs in important industrial clusters in Telangana (Hyderabad, Medchal-Malkajgiri and Warangal). The empirical results indicate that the Goods and Services Tax Network (GSTN) has indeed eliminated the cascade effect ‘tax on tax’ and enhanced the supply chain efficiency but it has also imposed a tremendous compliance burden and working capital lockups for smaller businesses. The paper ends with focussed policy recommendations for the GST council and the state administrations to make tax governance more optimal and promote inclusive economic development.
KEYWORDS
The introduction of the Goods and Services Tax has reshaped Telangana's economic landscape. It has eliminated the cascading tax trap, improved supply chain logistics, and created transparent digital footprints that make it easier for small businesses to access formal credit. At the same time, the transition has introduced structural hurdles, including increased administrative compliance costs and capital constraints for smaller firms. Overall, the stabilization of monthly tax revenues and the steady rise in active registrations show that Telangana's business community is successfully adapting to the formal system. This ongoing integration positions the state to leverage a more transparent, efficient, and interconnected domestic market.
· Government of Telangana. (2024). Socio-Economic Outlook of Telangana State. Department of Planning, Hyderabad. · Reserve Bank of India. (2022). State Finances: A Study of Budgets of 2021-22. RBI Advisory Publications. · Mukherjee, S. (2020). Evaluating the Impact of GST on Indian MSMEs: An Empirical Study. Indian Journal of Economics and Business, 19(1), 45-61. · Bird, R. M. (2012). The GST/VAT in Federal States: Corporate Chameleons or Federal Necessities? SSRN Electronic Journal, 42(2), 115-132. · Poddar, S., & Ahmad, E. (2009). GST Reforms and a Unified Market in India. National Council of Applied Economic Research (NCAER), Policy Brief No. 3. · Ramsey, F. P. (1927). A Contribution to the Theory of Taxation. The Economic Journal, 37(145), 47-61. · Ahmad, E., & Stern, N. (1984). The Theory of Reform and Indian Indirect Taxes. Journal of Public Economics, 25(3), 259-298.
Publication Date
7/4/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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Conflict of Interest
The authors declare no conflict of interest related to this research work.
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