A Study of GST Accounting Practices in Small and Medium Enterprises (SMEs)

The study titled “GST Accounting Practices in Small and Medium Enterprises (SMEs)” examines the impact of the Goods and Services Tax (GST) on accounting systems, compliance behaviour, and financial management practices of SMEs in India. GST was introduced with the objective of simplifying the indirect tax structure, ensuring uniform taxation, and enhancing transparency. While GST has provided benefits such as the seamless flow of input tax credit and reduction of cascading taxes, SMEs face several challenges in adapting to the new regime. This study analyses the accounting methods adopted by SMEs under GST, including cash and accrual basis accounting, maintenance of books of accounts, filing of GST returns, claiming of input tax credit (ITC), and compliance with digital reporting requirements. Using both qualitative and quantitative approaches, the research highlights that although GST has improved tax transparency and standardisation, SMEs continue to struggle with increased compliance costs, frequent changes in GST regulations, limited digital literacy, and dependence on accounting software or professional consultants. The findings suggest that effective GST compliance among SMEs depends on sound accounting practices, timely record-keeping, automation of accounting processes, and awareness of GST laws. The study concludes with recommendations aimed at capacity building, simplification of compliance procedures, and the development of user-friendly digital tools to reduce the compliance burden on SMEs. Overall, the study emphasizes the critical role of efficient GST accounting practices in ensuring financial discipline and regulatory compliance among SMEs.