Archive · 29 Sep 2026
GST compliance burden falls more heavily on smaller unincorporated firms
A study looked at small businesses that are run by their owners or partners.
It found that many of these businesses are not registered for GST or VAT.
Only 2.41% of the surveyed businesses were registered.
GST registration can help businesses join larger supply chains and claim tax credits.
However, registration also requires businesses to complete several forms and digital tasks.
These include filing returns, checking tax-credit records, and using e-way bills and e-invoices.
The study found that the smallest businesses generally face the highest costs compared with their sales.
The GST Council is expected to discuss ways to make the system easier.
A study found that GST compliance costs weigh more heavily on smaller unincorporated enterprises.
Only 2.41% of enterprises surveyed were registered under GST or the VAT regime.
Businesses must manage returns, input-tax-credit reconciliation, e-way bills, e-invoicing, and digital records.
Enterprises with annual turnover below Rs 4.9 lakh were likely to face higher compliance costs.
The GST Council is scheduled to discuss simpler registration, return filing, refunds, and blocked input tax credit on October 7.
- Who
- Researchers Sacchidananda Mukherjee and Shivani Badola of the National Institute of Public Finance and Policy studied unincorporated enterprises.
- What
- The study found that GST compliance costs are disproportionately high for smaller unincorporated businesses.
- When
- The GST Council is scheduled to meet on October 7 to discuss compliance reforms.
- Where
- The study concerns enterprises in India.
- Why
- Multiple filing, reconciliation, invoicing, record-keeping, and other requirements increase compliance costs and may discourage registration.
- Study authors
- Sacchidananda Mukherjee and Shivani Badola
- Institution
- National Institute of Public Finance and Policy
- GST/VAT registration
- 2.41% of enterprises in the ASUSE sample
- Higher-cost threshold
- Annual turnover below Rs 4.9 lakh
- Compliance requirements
- Periodic returns, input-tax-credit reconciliation, e-way bills, e-invoicing, and digital records
- Upcoming meeting
- GST Council meeting scheduled for October 7
- Reform topics
- Simpler registration and return filing, blocked input tax credit, and refunds