Empirical Assessment Of Goods And Services Tax Adoption And Business Performance Among Micro, Small And Medium Enterprises In Beawar

Abstract

The Goods and Services Tax (GST), implemented in India from July 2017, replaced a fragmented indirect tax 
structure with a unified national tax regime, carrying significant implications for Micro, Small and Medium 
Enterprises (MSMEs) that form the backbone of local economies such as Beawar in Rajasthan. This empirical 
study assesses the extent of GST adoption and its relationship with business performance among 150 MSMEs 
operating across manufacturing, trading, services, retail and agro-based sectors in Beawar. Using a structured 
questionnaire and stratified random sampling, primary data were collected on GST awareness, registration 
status, compliance costs, input tax credit (ITC) utilization, digital readiness and perceived performance outcomes 
including turnover growth, profitability and market reach. Descriptive statistics, cross-tabulation and correlation 
analysis were employed to examine relationships between GST-related variables and firm performance [1]. The 
findings reveal that although GST registration is widespread (72 percent), compliance costs have risen 
substantially in the short run, particularly for manufacturing and trading units, while firms with higher digital 
readiness and ITC utilization report significantly better performance outcomes. Correlation results indicate a 
moderate-to-strong positive association between ITC utilization and business performance (r = 0.66), and 
between GST awareness and performance (r = 0.58).