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Equity vs Efficiency in GST: A Textile Sector Perspective

Author Affiliations

  • 1Government First Grade College, Yaragatti, Rani Channamma University, Belagavi, Karnataka, India

Res. J. Management Sci., Volume 15, Issue (2), Pages 25-28, May,6 (2026)

Abstract

The implementation of the Goods and Services Tax (GST) in India represents a major fiscal reform aimed at enhancing economic efficiency through tax uniformity and the elimination of cascading effects. However, the reform has also raised concerns regarding equity, particularly in sectors characterized by structural dualism such as textiles. This paper examines the trade-off between equity and efficiency in the GST framework with specific reference to the textile sector. Using a conceptual and analytical approach based on secondary data, the study finds that while GST has significantly improved efficiency through supply chain integration, cost reduction, and formalization, it has simultaneously created disparities by imposing compliance burdens and excluding unorganized rural producers from key benefits such as input tax credit. The paper concludes that GST, in its current form, prioritizes efficiency over equity and suggests policy interventions to achieve a more balanced and inclusive tax regime.

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