Accumulated Goods & Service Tax (GST) Refund and Its Adverse Impact on Business Performance


Sunil Kumar
Gurmeet Singh


The implementation of GST helped in absorbing too many prevailing indirect taxes at the State and Center level which has rightly been viewed as the boldest tax reform undertaken in the Independent India. However, it was observed that it could not absorb many problems that persisted in the earlier system of Indirect Taxes such as GST rate disharmony, accumulation of GST refunds, fraud and tax evasion, documentation complexities and many more. Among all these problems the most serious issue is the agglomeration of GST refunds which has made a dent in the business performance of the Indian industry. The purpose of the present study is to explore factors accountable for the accumulation of the GST refund and its adverse impact on business performance. It also attempts to examine the role of moderating variables (GST rate, Sales Volume and GST Sales Types) between the factors and the corresponding accumulation of GST refunds. To confirm the various factors accountable for the agglomeration of GST refunds, a conceptual model was tested after adding three moderate variables causing the acceleration of GST refunds. The present study also measures the adverse impact of accumulated GST refunds on business performance using data collected from the 325 registered GST dealers in Punjab. The empirical part of the present study involves the testing of the hypothesis based on the conceptual model with the help of the structural equation model.

The study found among the five factors accountable for the accumulation of GST refunds errors and mistakes, technical errors and fraud and tax evasion are the most accountable for the agglomeration of GST refunds for dealers selling Intrastate and Interstate while Legal factors are more responsible for the dealers having exports and selling to SEZ. The study findings is useful for the economic policymaker to bring about the requisite changes in the present GST refund mechanism to safeguard the industrial units.


How to Cite
Kumar, S., & Singh, G. (2023). Accumulated Goods & Service Tax (GST) Refund and Its Adverse Impact on Business Performance. SJCC Management Research Review, 13(2), 18–43.


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