Impact of GST on MSME Performance in Bihar, India: A Thematic Review and GST Enabler–Barrier Framework

Abstract

Goods and Services Tax (GST) is one of the most important tax reforms in India which influenced the Micro, Small and Medium Enterprises (MSMEs) to manage taxation, compliance, input tax credit and working capital issues. Past research on GST and MSMEs has largely focused on the national level, while limited work has examined state-level contexts, especially less industrialised states like Bihar. This study explores the relationship between benefits of GST and its related challenges with respect to tax compliance and performance of MSME in Bihar, India. The study adopts a hybrid review approach. Keyword co-occurrence analysis was conducted using VOSviewer on a Scopus dataset of 86 articles for the period 2016–2026. The study also undertakes a thematic review of relevant studies and recent government policy documents. Tax compliance emerged as a central theme in the keyword co-occurrence map. Other important themes include GST reform, compliance cost, input tax credit, refund delays, digital filing, and firm performance. The review shows that GST has created both opportunities and challenges for MSMEs. Although, GST implementation simplified the indirect tax structure and created a unified market but MSMEs are facing challenges related to documentation, software use, classification, invoice matching, blocked credit, refund delays and working-capital pressure. These issues become more serious in Bihar because most enterprises are micro enterprises with limited credit access, heterogeneous clusters and lack of professional tax support. The novelty of this study lies in connecting GST–MSME research trends with Bihar’s state-level context and proposing a GST Enabler–Barrier Framework for MSME performance.