MSMEs Raise GST Issues Directly at ISF GST Samvaad 2.0

The India SME Forum (ISF) has facilitated a solution-driven stakeholder consultation, GST Samvaad 2.0, bringing MSME entrepreneurs face-to-face with senior GST authorities for a first-of-its-kind direct dialogue on practical compliance challenges under GST 2.0. The interactive session enabled MSMEs to raise specific pain points while also receiving clarifications, guidance, and commitments for further improvements directly from officials.

MSMEs highlighted challenges such as documentation burdens, registration bottlenecks - especially on shared premises, mismatches between input and supplier filings, manual record-keeping pressures and the inability of systems to adapt to sector-specific operational realities. Participants also pointed to the lack of a level playing field due to varying Goods Transport Agency (GTA) tax positions taken across different e-commerce platforms, as well as ITC accumulation issues that have intensified after recent rate reductions.

GST officials responded to a wide range of queries, clarifying processes around ITC eligibility, RCM applicability for GTA services, and registration documentation. They noted that some compliance gaps stem from operational challenges at the taxpayer level, including incomplete records or incorrect classification, while others relate to system-level issues currently being resolved. Officials emphasised that a comprehensive assessment of delays in refunds, cancellations, and registration processes is in its final phase and will soon be submitted to the Board, enabling targeted corrective action.

Opening the session, Dr. Sasmit Patra, Member of Parliament (Rajya Sabha), emphasised the importance of simplification for India’s small businesses, stating: “MSMEs should not be spending more time and money on GST compliance than on building their own business. If compliance costs can be reduced, if notices no longer create fear, and if annual GST hours can drop significantly, we unlock massive entrepreneurial energy. Simplification is not optional; it is essential for India’s growth story.”

This was followed by a deliberation with more than 60 entrepreneurs engaging directly with officials, presenting on-ground realities such as the need for clearer interpretational guidance, a more consistent approach across state and central jurisdictions, and automated digital tools to reduce human error. Several MSMEs also shared examples where system-level mismatches led to ITC blockages, stressing the need for better backend synchronisation and real-time updates.

Reflecting on the discussions, Vinod Kumar, President, India SME Forum, said: “We have trained nearly 4,500 entrepreneurs on GST filing and ITC claims, yet only a fraction could complete the process. Complexity is draining both capital and capacity from small businesses. Today’s dialogue has reaffirmed the need for practical simplification. Entrepreneurs want to comply - what they need are systems that are intuitive and processes that don’t consume disproportionate time and resources. Today’s consultation brought clarity on several issues and renewed confidence that challenges raised by MSMEs are being taken seriously at the highest levels.” 

Senior GST officials - Shri Vinayak Chandra Gupta (Chief Commissioner, CGST Delhi), Shri Pawan Kumar (Commissioner, CGST Delhi-East), Shri MD. Irfan Aziz (Commissioner, CGST Delhi-West), Shri Prashant Kumar Jha (Additional Director, DGGST), and Dr. Shafali G. Singh (Director, GST Council) - acknowledged the concerns raised and assured that simplification, greater consistency, clearer guidelines, and digital enablement remain priority areas. Officials welcomed the opportunity to hear sector-specific issues directly from entrepreneurs and encouraged MSMEs to continue sharing feedback.

Insights from GST Samvaad 2.0 will form the basis of ISF’s formal submission to GST authorities, capturing the challenges, clarifications provided, and recommendations emerging from the dialogue. The collective goal is to strengthen ease of doing business, improve predictability, and support a smoother GST experience for MSMEs across manufacturing, logistics, retail, and digital commerce.