- India SME Forum Meet Turns Spotlight on Ground-Level GST Bottlenecks
- Faster Refunds, Simpler Processes Top Wishlist of Small Businesses
- Interstate Expansion Hit by Registration Hurdles and Delays
- Working Capital Stress Mounts Amid Inverted Duty Structure Concerns
- Officials Assure Review as Industry Pushes for ‘Ease of Doing Business 2.0’
NE BUSINESS BUREAU
AHMEDABAD, APR 8
MSMEs and industry stakeholders highlighted key structural and operational challenges under the Goods and Services Tax (GST) framework at the GST Samvaad consultation organised by the India SME Forum in Ahmedabad, calling for faster refunds, simplified compliance processes, and reforms to ease interstate business expansion.
The consultation brought together senior GST officials, policymakers, and MSME representatives for a focused dialogue on on-ground implementation challenges and practical policy interventions to improve ease of doing business. Senior officials present at the consultation included Anoop Kumar Sharma, Commissioner, Central GST & Central Excise; Vishal Malani; B. M. Jograjya, Deputy Commissioner, State Tax Department, Gujarat and B. R. Dangar, Assistant Commissioner, State Tax Department, Gujarat.
MSME participants highlighted that while GST has streamlined indirect taxation, several implementation gaps continue to create disproportionate compliance and working capital burdens for small businesses. A key concern was the state-wise registration requirement, which compels small sellers to establish a physical presence in every state of operation. Participants highlighted that this leads to avoidable costs such as renting offices, hiring staff, and undergoing repeated physical verification processes – often delaying registrations from the stipulated 2–3 weeks to over two months, and limiting MSMEs’ ability to scale nationally.
Another widely discussed issue was the working capital pressures arising from the inverted duty structure, where higher taxes on input services compared to output goods lead to accumulation of input tax credit (ITC) with limited refund avenues. This, coupled with delays in ITC and TCS refunds, was cited as a major constraint on liquidity, especially for small businesses operating on thin margins.
Additional concerns included reconciliation complexities across GST returns, automated notices triggered by minor mismatches, vendor compliance risks impacting ITC eligibility, delays in registration approvals, and supply chain disruptions due to detention of goods over minor documentation errors.
Addressing the gathering, Anoop Kumar Sharma said, “The concerns raised by MSMEs and industry participants are important inputs for us. Platforms like GST Samvaad allow us to directly hear the challenges faced on the ground. While the GST system has evolved significantly since its introduction in 2017 and most processes are now digital, we recognise that operational issues and system-related challenges can persist. We encourage taxpayers to share such concerns, and we will examine the suggestions discussed today to further strengthen the GST ecosystem while ensuring that genuine taxpayers are supported and compliance remains robust.”
Vinod Kumar, President, India SME Forum, emphasised the need for continuous policy-industry dialogue to unlock the full potential of GST. He said,
” MSMEs have been strong proponents of ‘One Nation, One Tax’, and GST has undoubtedly enabled the creation of a unified market. However, implementation challenges – particularly around refunds, compliance complexity, and working capital blockages – continue to impact small businesses. Structural reforms such as simplified registration frameworks, faster refund mechanisms, and reduced procedural friction will be critical to improving ease of doing business and enabling MSMEs to scale.”
He added that platforms like GST Samvaad play a vital role in translating on-ground challenges into actionable policy inputs, fostering a more responsive and business-friendly tax ecosystem.
