Abstract : Micro, Small, and Medium Enterprises (MSMEs) are vital for Indian economic growth, contributing about 30% to GDP, 45% to exports, and employing over 110 million people. The Goods and Services Tax (GST) was implemented on July 1, 2017, bringing considerable challenges, particularly for the MSME sector, despite its intention to create a unified tax regime. GST is a well-known tax system initiated by the Government of India after 70 years of independence. It subsumed almost all the taxes that were part of the old tax framework. So far GST has been put in place in more than 160 countries around the world. France was the first country that comply with GST. Despite several benefits, such as simplifying the tax structure, creating a unified market, and improving tax compliance, GST has raised compliance costs, financial burdens, and technological barriers for MSMEs. The objective of this research paper is to emphasize the challenges that MSMEs encounter and the effect of GST on them. Quantitative data has been gathered to provide a comprehensive understanding of these challenges. The findings reveal that MSMEs encounter significant difficulties under the Goods and Services Tax (GST) system, including increased compliance complexities, cash flow constraints, and limited technological readiness. To effectively address these issues, the study emphasizes the necessity of simplified compliance procedures, improved access to financial and technological resources, and enhanced awareness programs.

Keyword : CGST, Challenges, GST, IGST, MSME, SGST.