The Impact of Recent GST Reforms on Local Businesses

The present study examines the impact of GST reforms (2023–2025) on 151 small and medium enterprises (SMEs) in Ahmedabad, focusing on slab rationalization, rate reductions, compliance enhancements, and their economic effects. The research evaluates operational costs, profit margins, sales volumes, financial performance, and sector-specific outcomes in textiles, pharmaceuticals, retail, and other industries. The sample primarily comprised businesses with annual turnovers below ₹1 crore (64.3%), with 43% in pharmaceuticals and 28.5% in food & beverage. Data were collected via structured questionnaires and analysed using SPSS, with crosstabulations and Chi-Square tests. Results show that 71.5% found e-invoicing user-friendly, but 84.1% disagreed with GST slab simplification benefits. GST reforms positively impacted operational costs for 71.5% of respondents, yet 66.9% reported no change in sales volumes. Sector-specific findings indicate pharmaceuticals benefited most from rate cuts (49.6% satisfied), while retail faced compliance challenges (64.2% rated burdens as slightly important). Cronbach’s Alpha (assumed reliable based on standard survey design) and hypothesis testing revealed significant associations between business type and most GST variables (p < 0.001), except government subsidies (p = 0.777). The findings align with economic theories of tax reform emphasizing compliance burdens and refund delays as key challenges. Practical implications include streamlined refunds, SME subsidies, and workshops to enhance GST adoption. This study offers insights for policymakers and businesses to foster sustainable GST implementation in India’s SME ecosystem