• Dr Laxmi Goritiyal
• Gautam Rangras

It was in the year 2000 when our then PM Vajpayee had set up a committee to draft the Goods and Services Tax (GST) law which would transform the Indian economy into a single commercial market and ease out the tax structure which was considered problematic primarily due to the ‘cascading effect of taxes’ where an item was taxed more than once from the production to the final retail sales/consumption stage in the indirect tax regime. With the expectation to increase foreign investment inflows and improve the ‘ease of doing business’ rankings of India, GST debuted on 1st July 2017 after much deliberations in the parliament to simplify the multi-layered, federal, state and local indirect tax structure by subsuming at least 10 types of indirect taxes into one tax. At the same time, the cost of production was expected to fall thereby benefitting the manufacturing sector of our country and boost ‘Make in India’ initiative to transform India into a global design and manufacturing hub. Indian economy’s facelift due to digitization and the paradigm shift to Goods and Service Tax (GST) has played an unavoidable impact on Micro, Small and Medium Enterprises (MSMEs) business model by largely affecting its labor and liquidity with an increase in compliance costs pooling a large number of small businesses into the tax net for the first time. Small and Medium Enterprises (SMEs) have had a tough time coping up with the compliance procedures and especially the different tax rates applicable on different raw materials which have affected their profitability and resulted in great ambiguity in deciding the final GST rate for the finished product. The objective of this paper is to find out the impact of GST on SMEs in manufacturing industry as there still exists a widespread anomaly with respect to the tax rates charged to different products of similar characteristics.

Goods and Services Tax (GST,), Compliance, Anomaly, SME, India

"Impact of Goods and Service Tax on Small and Medium Enterprises - Manufacturing Industry in Mumbai Region", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 6, page no.128-141, June 2019, Available :http://www.jetir.org/papers/JETIR1906I48.pdf

"Impact of Goods and Service Tax on Small and Medium Enterprises - Manufacturing Industry in Mumbai Region", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp128-141, June 2019, Available at : http://www.jetir.org/papers/JETIR1906I48.pdf