Factors Influencing GST Registration Avoidance among Small Businessmen when Turnover Exceeds the Limit: A Field Study
Purpose: Despite several years of Goods and Services Tax (GST) implementation in India, many small businessmen in semi-urban and rural areas continue to hesitate to register under GST, even after crossing the prescribed turnover threshold. This study examines the factors contributing to such hesitation, with particular emphasis on perceived penalties, digital challenges, compliance burden, and inadequate knowledge of GST provisions. Design/Methodology/Approach: The study is based on direct field experience and interactions with local traders across Shivpuri district, including Karera, Pohri, Kolaras, Picchore, and Shivpuri city. Primary data were collected through a structured questionnaire administered to 40 small businessmen. The data collected were analyzed using Mean Score Analysis, the Chi-Square Test, ANOVA, and Correlation Analysis to identify and examine the major factors influencing hesitation towards GST registration. Findings: The findings indicate that nearly 80% of the respondents’ experience apprehension regarding GST registration and compliance. The major concerns identified include fear of penalties, difficulties associated with digital procedures, perceived compliance burdens, and inadequate knowledge of GST rules and procedures. The statistical analysis further indicates that these factors play an important role in shaping the attitudes of small businessmen towards GST registration. Practical Implications: The study highlights the need for greater awareness and targeted support mechanisms for small businesses in semi-urban and rural areas. Local GST facilitation and support systems, simplified compliance procedures, accessible guidance, and practical training modules could help reduce the perceived complexity of GST and encourage eligible businesses to comply with registration requirements.