The introduction of the Goods and Services Tax (GST) in India on July 1, 2017 marked a landmark tax reform that consolidated multiple indirect taxes into a single unified system. This study investigates the impact of GST on the financial management practices of Micro, Small, and Medium Enterprises (MSMEs) in the Pune region, focusing on key dimensions including working capital management, cash flow, compliance costs, profitability, and accounting practices. Employing a descriptive research design, primary data were collected through structured questionnaires from 150 MSME owners and managers using convenience sampling. Statistical analyses—including Chi-square and paired t-tests—were applied to test research hypotheses. Findings reveal that while GST has significantly improved business transparency and encouraged digital record-keeping, it has also substantially increased compliance burdens, operational costs, and working capital requirements for the majority of respondents. The Chi-square test (χ² = 60.84, p < 0.001) confirmed a significant association between GST compliance and MSME profitability. The paired t-test (t = 4.487, p < 0.001) confirmed that GST has significantly increased working capital requirements. Despite short-term financial pressure, most MSMEs express a positive long-term outlook toward GST. The study recommends simplification of GST procedures, improved digital infrastructure, and targeted training programs to help MSMEs maximise the benefits of the unified tax regime.

Keywords— GST; MSME; Financial Management; Working Capital; Tax Compliance; Input Tax Credit