Gst Compliance and Its Impact on the Operational Performance of Small and Medium Businesses in Tamil Nadu

Abstract

The implementation of the Goods and Services Tax (GST) has brought significant changes to the tax administration and business practices of small and medium businesses in India. Although GST aims to simplify taxation, improve transparency, and establish a unified tax system, its compliance requirements may create operational challenges for smaller enterprises. This study examines GST compliance and its impact on the operational performance of small and medium businesses in Tamil Nadu, with particular attention to GST registration, return filing procedures, compliance costs, record keeping, and documentation practices. It also explores the time and administrative effort required to meet GST obligations and the difficulties businesses encounter in understanding tax regulations, maintaining accurate financial records, and completing periodic filings. The study focuses on how these compliance activities influence the routine functioning and administrative management of small and medium businesses. The study seeks to understand the relationship between GST compliance and key dimensions of business performance, including operational efficiency, employee productivity, financial management, and the time available for core business activities. Particular emphasis is placed on identifying the challenges faced by businesses with limited financial resources, accounting expertise, and access to professional tax assistance. The findings of the study are expected to provide insights into the practical implications of GST compliance for small and medium businesses in Tamil Nadu and identify areas where procedural simplification, digital support, and compliance awareness can be strengthened. The study may also offer useful guidance to business owners, policymakers, and tax authorities in developing measures that reduce unnecessary administrative burdens while encouraging effective tax compliance and sustainable business operations.