THE IMPACT OF GST DETERMINANTS ON THE GROWTH OF INDIAN MSMEs: EVALUATING THE MEDIATING ROLE OF GST COMPLIANCE

This study provides robust empirical evidence that the three GST determinants examined — Knowledge, Input Tax Credit, and Revenue Neutral Rate — each exert significant positive effects on the perceived growth of manufacturing MSMEs in Hyderabad, Telangana. Furthermore, GST compliance functions as a meaningful and statistically significant partial mediator of all three relationships, amplifying the growth effects of each determinant. The integrated analytical framework (multiple regression + PLS-SEM) employed in this study yields a more complete and differentiated understanding of the GST–MSME growth nexus than prior studies relying on single-method approaches. The collective findings affirm that the transformative potential of GST for MSME development is real but conditional: it is realised most fully when enterprises possess adequate GST knowledge, can efficiently access ITC benefits, perceive the prevailing rate structure as reasonable, and actively maintain compliance. Any gap in this chain attenuates the growth dividend. Policymakers who seek to maximise the developmental impact of GST on MSMEs must therefore address all four dimensions simultaneously.

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