An Assessment on Impact of Goods and

Services Tax (GST) on Customer

Enablement and Perception: An
Empirical Analysis of the Mid-Sized
Manufacturing Sector in Chennai
Region
A Research proposal and presentation on my Ph.D. topic
 Introduction
 The implementation of the Goods and Services Tax (GST) in India on July 1,
2017, marked a significant reform in the country’s indirect taxation system. Aimed
at simplifying the complex web of existing state and central taxes, GST was
introduced as a unified tax structure to promote ease of doing business, reduce tax
cascading, and enhance compliance. While much attention has been given to its
economic and fiscal impact, there remains a pressing need to explore how GST
has influenced customer efficiency and perception, particularly within specific
industrial segments.
 The mid-sized manufacturing sector plays a critical role in India’s industrial
landscape, contributing significantly to employment, regional development, and
economic output. In regions like Chennai—a growing industrial hub—the
manufacturing sector faces unique challenges and opportunities under the GST
regime..
 From invoicing and compliance procedures to pricing structures and customer
communication, GST has brought substantial operational changes that may directly or
indirectly shape customer behaviour, satisfaction, and transactional efficiency
 This research aims to assess how the implementation of GST has affected customer
efficiency (in terms of invoicing system, credit terms with delivery period and pricing
policy) and customer perception (such as product standard, durability, material
dispatch and warranty period) in the context of mid-sized manufacturing firms in
Chennai region. By conducting an empirical analysis, the study seeks to bridge the
gap between tax policy implementation and its real-world impact on business-
customer dynamics at the regional level.
 Objectives of study
 To examine the level of awareness and understanding of GST rates and HSN code
among customers dealing with mid-sized manufacturing firms in Chennai.
 To assess the impact of GST implementation on customer’s bill on hold including
shipments, invoicing system , credit period and payment terms
 To investigate how GST has influenced pricing policy and its effect on customer
buying scale (in terms of quantity) in the manufacturing sector.
 To analyse the relationship between GST compliance by manufacturers and
business to business transaction.
 To compare customer efficiency and perception in the pre- and post-GST periods
within mid-sized manufacturing firms.
 To determine whether GST has led to any measurable improvements or delays in
customer’s(Entity) delivery and after sale services.
Independent, Dependent, Moderate and
Control variable
 ID Variables :
 M Variables :
 GST Implementation
 Changes in tax structure  (Dual focus Interface)Staff and
 Compliance requirements customer support
 Invoicing system
 Input tax credit system

 D Variables :
 Customer Enablement
 Invoicing System
 Credit terms and delivery period
 Pricing basis and policy
 Customer Perception
 Product Standard and durability
 Handing over and after sale service
 Material dispatch with warranty claim
 Review of Literature
 Consumer Perception Post-GST
Nikam’s survey (Apr 2022) finds consumers were generally optimistic about GST’s long-term
benefits, with mixed effects on prices and a smoother transition perceived.
[Link]
 Manufacturing Sector Testimonials
Executives reported competitive advantages post-GST—such as simplified tax compliance
and enhanced transparency—but also flagged skill gaps, timeline synchronization issues, and
concerns over removal of state incentives.
Modern Manufacturing India+1
 Compliance & Working Capital Concerns
Chambers/Trilegal (2016) note that GST treats stock transfers as taxable supplies, potentially
straining working capital and requiring a reassessment of pricing and supply strategies.
Chambers
 Independent Variable
a) GST Implementation :
1. Sharma, P. & Mehta, R. (2018). "Impact of GST on Consumer Behavior and Business
Efficiency.” This study explores how GST has affected customer-facing functions
such as pricing clarity, billing transparency, and service speed in retail and mid-
sized manufacturing sectors . (International Journal of Business and Management
Invention).
2. Sinha, A. (2019). "GST and Its Role in Enhancing Business Efficiency.” Focuses on
operational efficiencies post-GST in mid-sized firms, especially improvements in
billing processes, return filing, and logistics. (Journal of Commerce & Management
Thought).
3. Rao, G. & Mukherjee, S. (2017). "GST in India: Impact on the Common Man and
Business.” Analyses the anticipated and real-time implications of GST on customers
and businesses. (National Institute of Public Finance and Policy (NIPFP)).
4. KPMG India Report (2018). "Impact of GST on Indian Manufacturing Sector.” This
report discusses GST’s effect on various business dimensions including customer-
facing service efficiency. (Industry Report).
5. Rani, M. & Singh, K. (2020). "Customer Satisfaction in the Post-GST Era: A Study of
Mid-Sized Firms. ” Investigates the correlation between GST compliance by
manufacturers and levels of customer satisfaction. (Indian Journal of Economics
and Development).
b) Change in tax Structure :
[Link]’ Awareness & Perception of GST in India A 2017–2019 body of research using structured
questionnaires across regions (Rajasthan, Delhi NCR, Kerala) consistently shows varied levels of consumer
awareness about GST. Findings highlight that greater awareness is linked with more favourable perceptions,
particularly regarding fairness and transparency of the tax system ([Link]).
2. Public Sentiment & GST Barriers : Tomar, Srivastava, & Verma (2018) investigate societal attitudes
toward GST using public sentiment analysis. They reveal significant psychological and behavioural resistance,
such as confusion or anxiety, especially during early rollout phases This underscores how initial customer
perception can be adversely affected by unfamiliarity with tax reform (AIP Publishing).
3. Tax Compliance and Structural Transition : Research on SMEs highlights how GST replaced 17 indirect
taxes with a multi-stage structure (CGST, SGST, IGST, etc.), introducing new compliance challenges.
Increased documentation and procedural complexity often led to heightened burden and reduced operational
efficiency in compliance—crucial to customer transactional experience ([Link]).
4. GST Effects on Business Performance (MSMEs) : A sector-specific study on SMEs finds that the
technology-enabled GST Network (GSTN) eased tax filing burden through e-filing and automation. However,
it also required IT upgrades, costing time and resources, particularly for small firms. This had a knock-on
effect on customer efficiency, such as delays in billing or service delivery ([Link]).
c) Compliance Requirements:
1. Perception of Tax Complexity and Compliance Behavior (Sharma, et al., ~2021) : This study explores
how the perceived complexity of tax systems—both legislative (length and ambiguity of laws) and
procedural (complicated forms, recordkeeping, computations)—drives taxpayer noncompliance. Crucially, it
notes that greater complexity tends to negatively influence compliance behaviour due to reduced clarity and
increased administrative burden. (PMC)
2. Framework of Tax Compliance Obligations (OECD-based study on SMEs, Egypt, 2010s) This
framework outlines four core compliance requirements, Registration in the tax system, Timely filing
and lodging of information, Accurate reporting with records and Timely payment of liabilities. These
requirements significantly affect the compliance burden and are shaped by institutional trust and
perceived fairness (MDPI).
3. Internal Compliance Tactics: A Multidisciplinary Review (Foorthuis, 2020) This comprehensive
review presents a typology of 45 internal compliance tactics, ranging from process-oriented controls to
comprehensive compliance strategies. It advocates a shift from fragmented tactics to integrated
strategies. (arXiv).
d) Invoicing System
1. Automatic Invoicing System Effectiveness & Efficiency :Anwar
(2011) Examines the shift from manual to automated invoice processing at Company Perintis
Mandiri using the Financial Invoice Automation System (IAS). Through a case-study
approach, the research demonstrates notable improvements in processing speed, accuracy, and
internal control, highlighting the positive impact on operational efficiency. (Grafiati).
2. E-Invoicing in Public Procurement in Europe: A case study from the EU
(Tabique Engenharia) shows that implementing e-invoicing in public procurement led to
significant gains: streamlined administrative tasks, reduced paper costs, faster processing,
fewer errors, improved information security, and a modern, innovative image conveyed to
customers. (Ibima publishing).
3. Impact of VAT E-Invoicing on Firm Performance (Peru, 2019) : An IMF
working paper analyzing Peru’s VAT e-invoicing rollout reveals that adoption led to increases
of over 5% in reported sales, purchases, and value-added—especially among smaller firms
with compliance challenges. The system lowered compliance costs and strengthened tax
enforcement.
e) Input Tax credit :
[Link] Analysis on the Input Tax Credit under GST (Joshi & Khandare,
2023) : A study surveying tax facilitators found that perceptions regarding ITC attributes
(such as transparency and fairness) were largely uniform, indicating a general consensus—
but not necessarily a profound appreciation or criticism—of the system’s
fundamentals.(ICMAI RNJ)
2. Customer Perception Toward ITC in Alwar Region (Bindal, Gupta & Dubey,
2018) A regional study from Alwar emphasized that the clarity and ease of utilizing ITC
provisions are central to fostering a taxpayer- (and customer-) friendly experience.(Recent
scientific).
3. Practical Challenges of ITC Matching (Economic Times Report) : This piece
outlines the massive workload required to match B2B invoices for ITC reconciliation—
billions of records monthly—with infrastructure by GSTN and GST Suvidha Providers
(GSPs) under high stress. (The economic times)
4. Challenges in the ITC Mechanism under India’s GST (Kaarthhik & Dhivya) :
This critical analysis identifies key bottlenecks: procedural versus substantive rights
disconnect, GSTN portal glitches (e.g., auto-population errors, mismatched returns), and
supplier non-compliance hindering credit flow. The study suggests reforms such as real-time
verification and automated refund mechanisms. (IJLRA)
Dependent Variable:
a) Customer Efficiency :
1. Determinants of Quality and Efficiency in Service Operations: This study, grounded in
knowledge-based and resource-based views, analyses how customer orientation, employee
capability, and job-related training bolster both service quality and efficiency in a sample of
249 Chinese service firms. It demonstrates the crucial role of internal knowledge and workforce
development in improving operational performance, directly impacting customer efficiency.
Emerald
2. Operational Efficiency & Service Delivery in Indian Telecom Providers : Using a two-stage
Data Envelopment Analysis (DEA), this comparative study assesses how telecom firms in India
translate infrastructure and resources into quality customer service. Firms that score high in
both operational efficiency and service delivery show superior performance, highlighting the
linkage between backend efficiencies and enhanced customer-facing efficiency. Emerald
ResearchGate
3. Service Productivity Meta-Analysis: Firm and Customer Perspectives: Built on
Grönroos and Ojasalo’s (2004) model, this meta-analysis defines service productivity as the
efficiency of converting input resources into value for customers. It underscores how dimensions
like employee support, process design, and service system alignment drive efficiency at the
customer interface—key to lowering wait times, reducing friction, and boosting perceived
efficiency. SpringerLink
b) Customer perception :

 Consumer Awareness and Perception Towards GST in India (NCR Study, 2019) :Taru Maheshwari
and Mukta Mani conducted a quantitative study in the National Capital Region (NCR) analyzing consumer
awareness and perception of GST. The study deployed robust statistical tests (like Kruskal-Wallis and
Mann-Whitney) and concluded that variations in perception are influenced by demographic factors such as
age, profession, and income. This underscores the importance of customer heterogeneity in shaping
perception of the new tax regime. (ResearchGate)
 Consumer Awareness & Perception of GST (Garg & Anand, 2022) : Yogesh Garg and Neeta Anand
explore how consumer awareness correlates with perceptions of fairness and transparency of GST. Their
results suggest that while many consumers support the simplification of tax structure through GST, levels
of perception significantly hinge on the depth of awareness and understanding. ([Link])
 Consumer Awareness and Perception in Belagavi City (Talawar & G R, 2025) :This case study in
Belagavi evaluated both awareness and consumer perception using Likert-scale questionnaires. Findings
revealed that although consumers appreciate GST’s promise of transparency and uniformity, a substantial
part remains uninformed about its specifics—like slabs and input tax credit—limiting full positive
perception.([Link]).
 Evaluating Public Perception of Tax Reforms Including GST (Jain, 2024) :Mangi Lal Jain’s survey
across five Indian states assessed perceptions of GST and broader tax reforms. Highlights include:
([Link])
 Impact of GST on Consumer Perception & MSME Functioning (Muthamma & Pavan Anthony,
2025) :This research examines GST's influence on consumer attitudes and MSME stakeholders. It reports
mixed consumer responses—some appreciate enhanced transparency and clearer invoicing, while others
react negatively due to perceived complexity or higher prices.
Mediating Variable
Customer and staff support
 1. Service Climate and Customer Perception :Research on service climate highlights how employees'
perceptions of supportive organizational cultures—enabling quality customer service—drive improved
customer satisfaction, loyalty, and perception. Organizational backing (training, autonomy, recognition)
empowers staff to better serve customers, which, in turn, enhances customer trust and perception of
transparency and efficiency in transactional contexts. This aligns with your focus on how staff support
affects customer views of GST-related processes or tax compliance systems.
Wikipedia
 2. Hybrid Human-Virtual Support Systems & Customer Satisfaction :A study on hybrid customer
service models (human operators working alongside virtual agents) found that when staff support
bolsters technology, customer waiting times decrease and satisfaction increases. This suggests that
effective staff support, even in automated or digital compliance environments (e.g., GST invoicing
systems), can elevate both perceived and actual efficiency, directly influencing customer perception.
arXiv
 3. Satisfaction as Mediator Between System Quality and Compliance :In studies of e-tax
systems, user satisfaction mediates the relationship between system quality (e.g., ease of use,
reliability) and tax compliance behaviour. High-quality systems combined with strong support (help
desks, guidance, training) increase satisfaction and compliance. By analogy, customer and staff
support in GST or invoicing systems can boost satisfaction, which may improve customer perception of
system fairness, transparency, and efficiency. MDPI
 Research Gap
 Customer-Centric Insights within Manufacturing: Most studies focus on business
operations or administrative/taxpayer perspectives—not on how customers
themselves (e.g., procurement departments or buyers downstream) experience
operational efficiency and perceive the manufacturer post-GST.
 Regional Context of South Chennai and Mid-Sized Firms: There's little or no
research exploring how GST impacts customers of mid-sized manufacturing units
specifically in South Chennai—a distinct industrial geography—where operational
realities and customer expectations may differ from larger firms or other regions.
 While existing literature investigates operational and SME compliance
challenges arising from GST, there is a notable absence of studies examining how
GST implementation has affected the efficiency of customer interactions and
customer perceptions in the mid-sized manufacturing context. Specifically, there's a
gap in primary empirical research capturing buyers' (customers') experiences—in
terms of transaction speed, billing transparency, trust, and satisfaction—within the
South Chennai region.
 Conceptual Framework
GST Implementation

Change in tax Structure

Customer
Dual focus perception
Compliance Requirement Interface
(Staff Customer
&Customer Enablement
Invoicing System Support)

Input Tax Credit System