With the Union Budget 2026-27 around the corner, small business owners across India have urged the Centre to announce GST relief and tax simplification measures to help the sector cope with rising costs and compliance challenges.
Traders and small entrepreneurs, particularly in cities like Hyderabad, said the GST structure continues to strain cash flows due to high input costs, delayed refunds and complex filing requirements. They expressed hope that the upcoming budget will focus on easing the tax burden on micro and small enterprises, which form the backbone of India's economy.
Rising Costs Hit Small Businesses
Small business owners highlighted that increasing prices of raw materials, logistics expenses, and electricity charges have significantly reduced profit margins. Many said that while GST has streamlined indirect taxation, the compliance burden remains heavy for small traders with limited resources.
"Lower GST rates or higher exemption limits would help small businesses survive in a competitive market," said a local trader, adding that frequent return filings and working capital blockages continue to impact daily operations.
Demand for GST Simplification and Faster Refunds
Ahead of the budget presentation, small business associations have demanded:
- Simplified GST return filing for small taxpayers
- Faster GST refunds to ease liquidity pressure
- Rationalisation of GST rates , especially where input taxes are higher than output taxes
- Higher turnover thresholds for GST registration and composition schemes
Business owners said that delayed refunds and inverted duty structures often lock up working capital, forcing small firms to rely on costly borrowings.
Budget 2026 Expectations from MSMEs
The MSME sector is looking to the Union Budget for policy measures that encourage growth, formalisation, and job creation. Industry representatives believe that GST relief, coupled with easier access to credit, would help small businesses expand operations and improve competitiveness.
Experts note that targeted tax relief for small enterprises could also support domestic consumption and strengthen supply chains, especially at a time when global economic uncertainty persists.
Focus on Ease of Doing Business
As Finance Minister Nirmala Sitharaman prepares to present the Union Budget on February 1, small business owners hope the government will prioritise ease of doing business, tax certainty, and compliance reduction.
With MSMEs contributing significantly to employment and GDP, stakeholders believe that meaningful GST reforms in Budget 2026 could provide much-needed momentum to the sector and strengthen India’s economic growth outlook.
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