Volume 2 - Issue 4, July - August 2026

Goods and Services Tax (GST), which came into effect in India on July 1, 2017, was designed to streamline the indirect tax regime, improve transparency, and foster a single market for goods and services throughout the country. Since the employment generation, industrial development and economic growth is largely influenced by the contribution of Micro, Small and Medium Enterprises (MSMEs) to the economy, it is crucial to understand the effect of GST on it and its impact on MSMEs' performance and formalisation. The present study investigates the impact of GST on sales growth, competitiveness in the market, formalisation of the business and ease of doing business for MSMEs. The study used a descriptive and analytical research design and quantitative research approach. The primary data was gathered from 280 MSME owners, managers and business operators in two districts of Madhya Pradesh namely Gwalior and Indore by using a structured questionnaire. The sampling of the respondents used the convenience sampling. Data collected were analysed with descriptive statistics and simple linear regression analysis with SPSS software. The results show that the impact of the implementation of the Goods and Services Tax on the growth of sales and competitiveness in the market is very positive for MSMEs. The findings also indicate that GST has a positive effect on business formalization and ease of doing business as it promotes compliance, transparency, and adopting formal business practices. These relationships were also found to be statistically significant through regression analysis. The findings of the study indicate that GST has helped in enhancing the performance and formalization of MSMEs, although there were initially compliance and technological hurdles. The findings highlight the need for continuous policy support, simplified compliance procedures, and enhanced awareness programs to maximize the benefits of GST and promote sustainable growth of the MSME sector in India.

Rinku Agrawal, Dr. Sanjay Pandey,"Impact of Goods and Services Tax (GST) on Sales Growth, Market Competitiveness, and Business Formalization of MSMEs" International Journal of Advanced Multidisciplinary Research and Educational Development, V2(4): Page(205-216) July - August 2026. ISSN: 3107-6513. www.ijamred.com. Published by Scientific and Academic Research Publishing.