Over 6.5 Million MSMEs Registered Under GST: Centre

The Indian government has revealed that over 6.5 million Micro, Small, and Medium Enterprises (MSMEs) have registered under the Goods and Services Tax (GST) regime since its launch. The data, shared in the Rajya Sabha, highlights the scale of MSME participation in the tax system and the efforts to simplify compliance for small businesses.

According to Minister of State for Micro, Small and Medium Enterprises, Shobha Karandlaje, as of 28 February 2025, a total of 65,15,314 MSMEs have reported having a GST Identification Number (GSTIN) on the Udyam Registration Portal. This indicates that a significant portion of small enterprises are now part of the formal tax structure, allowing them to benefit from various government incentives and schemes.

To address concerns about compliance costs and administrative burdens, the GST Council had previously formed a Group of Ministers (GoM) to assess the impact of the tax system on MSMEs. Based on their recommendations, the government has introduced several measures to ease the compliance burden on small businesses.

One such measure is the exemption from GST registration for enterprises that fall below a certain turnover threshold. Businesses supplying goods with an annual turnover of up to ₹40 lakh and those providing services with a turnover of up to ₹20 lakh are not required to obtain GST registration. This exemption aims to reduce the financial and administrative strain on small enterprises, particularly those with limited resources.

Additionally, the government has promoted the Composition Levy Scheme, an alternative tax system designed for MSMEs with a turnover below a prescribed limit. This scheme allows small businesses to pay a fixed percentage of their turnover as tax, rather than following the standard GST filing procedures, thereby simplifying compliance.

To further streamline tax filing for small businesses, the government has introduced special provisions allowing eligible MSMEs with an annual turnover of up to ₹5 crore to file quarterly returns instead of monthly filings. However, these businesses are still required to make tax payments on a monthly basis. This initiative aims to reduce paperwork and improve cash flow management for MSMEs, enabling them to focus more on business operations rather than tax compliance.

The Centre’s initiatives reflect an ongoing effort to create a more business-friendly environment for MSMEs, which form the backbone of India’s economy. While the government continues to introduce measures to simplify GST compliance, challenges remain in ensuring that small businesses can fully leverage the benefits of the tax regime without facing excessive administrative hurdles.