Textile Transformations: Assessing the Impact of GST on MSMEs in Peenya Industrial Area

Background: The Goods and Services Tax (GST), implemented in India in July 2017, aimed to simplify the tax structure and enhance compliance for businesses. This study evaluates the impact of GST on Micro, Small, and Medium Enterprises (MSMEs) in the textile sector, focusing on those located in the Peenya Industrial Area, which is recognized as a key hub for textile manufacturing and innovation. Methods: A mixed-methods approach was adopted, integrating quantitative surveys and qualitative interviews with MSME owners. The quantitative surveys focused on measuring changes in compliance costs, operational efficiency, and overall business growth following the implementation of GST. In-depth qualitative interviews were conducted to gather insights into the personal experiences of MSME owners regarding the GST framework. Results: The findings suggest that while GST has facilitated streamlined tax processes and enhanced compliance among MSMEs, several challenges remain. Notably, increased compliance costs and a widespread lack of awareness regarding GST regulations significantly hinder the ability of MSMEs to fully adapt to the new tax structure. Additionally, many MSMEs reported difficulties in understanding the compliance requirements, which has impacted their operational efficiency. Conclusion: To maximize the benefits of GST for MSMEs, it is essential to develop targeted support and training programs tailored to the unique challenges faced by these enterprises. Such initiatives will assist businesses in effectively navigating the GST framework, ultimately promoting sustainable growth and resilience within the textile sector.