MSMEs back GST reforms, call for faster refunds and better working capital support: Deloitte India GST@9 Survey
- About 99 percent of MSMEs reported positive or neutral sentiment towards GST, reflecting growing confidence in the tax regime.
- Nearly 89 percent of MSMEs supported automated interest on delayed GST refunds, highlighting the need for faster liquidity support.
- About 88 percent favoured invoice-based ITC eligibility, while 87 percent supported quarterly tax payment mechanisms to simplify compliance.
- Key refund-related demands included year-end settlement of accumulated ITC balances and expansion of inverted duty refunds to cover input services and capital goods.
National, 27 June 2026: As India’s MSMEs continue to play a pivotal role in driving economic growth, exports and employment, their perception of GST has steadily evolved from a compliance mandate to a facilitator of formalisation and operational efficiency. While reforms such as simplified return filing and threshold relaxations have eased compliance, businesses expect the next phase of GST to prioritise liquidity enhancement, simplification of Input Tax Credit (ITC) rules and reduction in working capital pressures.
According to Deloitte India’s GST@9 Survey: The Next Phase – GST 2.0, MSMEs are now looking beyond adoption towards optimisation. The findings highlight strong support for reforms aimed at improving liquidity and streamlining compliance. Nearly 89 percent of respondents favour automatic payment of interest on delayed GST refunds and pre-deposits, while 88 percent support invoice-based ITC eligibility and 87 percent back quarterly tax payment mechanisms. Quarterly return filing has emerged as the most widely recognised GST reform among MSMEs, with recognition increasing more than fivefold from 12 percent in 2023 to 67 percent in 2026.
“India’s MSMEs create a third of our nation’s output and nearly half of its exports. GST is a key enabler in the functioning of the nation’s supply chain and in creating a transparent, formal ecosystem. The next generation of reforms must enable efficiency and liquidity by improving refunds, simplifying Input Tax Credit rules and enabling seamless credit utilisation. Tax competitiveness can enable businesses to scale faster and strengthen India’s position as a global manufacturing and services hub.“
Gokul Chaudhri, President, Tax, Deloitte South Asia
“India’s MSMEs also highlighted the need to address working capital constraints arising from inverted duty structures. Nearly 69 percent of respondents support expanding the inverted duty refund framework to include input services and capital goods, while 63 percent favour further GST rate rationalisation to reduce inversion-related inefficiencies. In addition, 51 percent of MSMEs advocate for year-end refunds of accumulated ITC balances, and 49 percent support the introduction of provisional refunds for past periods.“
Mahesh Jaising, Indirect tax leader, Deloitte South Asia
There is also strong demand for broader systemic reforms, with 72 percent of respondents backing a centralised audit mechanism, 70 percent supporting the payment of Reverse Charge Mechanism (RCM) liabilities through ITC and 64 percent calling for a simpler GST rate structure with targeted exemptions toenhance ease of doing business.
As India advances towards its US$10 trillion economic ambition, the next phase of GST reforms presents a significant opportunity to create a simpler, more predictable and growth-oriented tax ecosystem that empowers MSMEs to invest, innovate and scale with confidence.
About the Survey
Deloitte India’s GST@9 Survey: The Next Phase – GST 2.0 received responses from 1,096 senior executives across sectors and organisation sizes. The study captures industry perspectives on GST’s nine-year journey and the priorities for its next phase of evolution, covering areas such as technology adoption, compliance, dispute resolution, ease of doing business, MSME enablement and future GST reforms.
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