The Goods and Services Tax (GST) has transformed India's indirect tax system by introducing a unified, technology-driven framework, yet small businesses continue to face real difficulties in meeting GST return-filing obligations. This study, undertaken during an internship at Nouman Sait & Associates, Chartered Accountants, Bengaluru, examines the GST return-filing process and the compliance challenges faced by small businesses, and situates these firm-level findings within the broader national trend of GST base expansion. A log-linear regression on five years of official GST collection data (FY 2020-21 to FY 2024-25) confirms significant year-on-year growth (β̂ = 0.1635, t = 7.531, p = 0.0049, R² = 0.95), corresponding to an average annual growth rate of approximately 17.8%. Primary data collected from 82 small-business respondents via a structured questionnaire show that 77% rely on an accountant or chartered accountant firm for compliance, 48.7% experience filing difficulty “often” or “always”, and Input Tax Credit (ITC) reconciliation is the single most difficult stage of compliance. Chi-square tests of independence find that annual turnover is significantly associated with filing-difficulty frequency (χ² = 21.611, p = 0.042) and that GST registration scheme is significantly associated with receipt of a GST notice (χ² = 7.524, p = 0.023), while who manages compliance is not significantly associated with late-fee incidence (χ² = 0.128, p = 0.938). The findings indicate that GST compliance difficulty is real, statistically linked to firm characteristics, and not fully resolved by outsourcing compliance alone, and the study recommends targeted simplification of the ITC/GSTR-2B reconciliation workflow and compliance support directed at Regular-scheme taxpayers.
Publication Date: 2026-07-28