Challenges and Opportunities of GST on Trade and Industries: With Special Reference to Madhya Pradesh

Abstract

The introduction of the Goods and Services Tax (GST) in India marked a transformative shift from a fragmented indirect taxation system to a unified, transparent, and streamlined framework. This study explores the challenges and opportunities that GST has brought to trade and industries in Madhya Pradesh, focusing on its impact on tax compliance, revenue generation, operational efficiency, and economic development. Utilizing both primary data—collected through structured surveys from business owners and traders—and secondary data from official records, the study offers a comprehensive evaluation of GST’s effects. The findings reveal that GST has improved tax transparency, enhanced compliance, and facilitated inter-state trade by eliminating cascading taxes. Madhya Pradesh has witnessed steady growth in GST revenue collection, especially post-pandemic, indicating economic recovery and stronger participation by businesses in the formal tax structure. MSMEs, while benefiting from broader market access and input tax credit, continue to face challenges such as compliance complexities and delayed refunds. Despite initial hurdles, the overall business sentiment toward GST remains positive, with many acknowledging its role in fostering economic integration and reducing evasion. The study concludes that GST has significantly contributed to a more structured and efficient tax environment in Madhya Pradesh, offering a promising outlook for future trade and industrial growth.