GST Stability Comes at Rising Compliance Cost for MSMEs, Survey Data Suggests, says Economic Survey
According to the Economic Survey, GST has brought stable tax collections but increased compliance costs for MSMEs
The Economic Survey said the GST system has helped bring stability to tax collections in India. It has made tax payments more predictable for the government and created a single national market. However, the Survey also said this stability has come with higher compliance costs for small businesses.
According to the survey, MSMEs face more difficulty in following GST rules than large companies. Small businesses need to file many returns, keep detailed digital records, and often depend on accountants or tax consultants. All this costs time and money.
The Survey explained that big companies can manage these costs because they have more staff and higher turnover. MSMEs do not have this advantage, so GSTcompliance becomes more expensive for them, even when their tax amount is small.
The Survey also pointed out that frequent changes in GST rules and formats add to the burden. Many small traders and manufacturers struggle to keep up with new requirements, especially in smaller towns and rural areas where access to good internet and professional support is limited.
The Economic Survey said the government has taken steps to reduce this burden. Measures like quarterly return filing and the composition scheme have helped. However, the Survey said more simplification is needed.
🏛️ Union Budget 2026–27 decoded with laws and notifications | Click Here
It warned that if compliance costs stay high, small businesses may avoid formal systems or lose competitiveness. MSMEs are important for jobs and supply chains, and too much compliance pressure can slow their growth.
The Survey said future GST reforms should focus on making the system simpler for MSMEs while keeping tax collections stable.Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
