This study looks into how changes in the Goods and Services Tax (GST) rates affect pricing strategies and how efficiently the Input Tax Credits (ITCs) are realized, which in turn influences the profit margins of micro and small enterprises in Pune, India. Using a survey-based quantitative method, we engaged with 148 GST-registered firms (with 148 valid responses) from sectors that directly engage with consumers—these include enterprises in food and grocery retail, restaurants, clothing, repair services, personal care, and automotive parts. We ensured a representative sample by using stratified cluster sampling that spanned across the commercial wards of Pune, focusing on businesses with less than 50 employees and an annual turnover of ₹5–10 crore that had been compliant with GST for at least 12 months. We captured the data via a structured questionnaire written mostly in Marathi (the primary language of Pune) to facilitate understanding. The questions probed pricing change strategies for their top products over a period of 6–12 months; the kinds of GST rate shifts they experienced; how efficiently they were realizing Input Tax Credits; and any other controls necessary to understand the context of these enterprises. 5) Gross margins (r=0. 62 for gross, p<0. 001) improved for small firms with higher GST index scores. The small firms with gross margins closer to 50% had the highest index scores and were best positioned to compete in the Pune market. Overall, improvements in competitiveness for the small firms studied correlate well with increases in gross margins. With sector-specific training, the authors suggest, smaller firms could realize even better benefits from the GST and thus be more resilient in their respective markets.

GST Rate Changes, Input Tax Credit (ITC), Pricing Strategies, Profit Margins, Pass-Through Effect, Micro and Small Enterprises (MSEs), Pune India, Survey-Based Study, Consumer-Facing Sectors, Tax Efficiency, Regression Analysis, Small Business Compliance, Discounting Tactics, Pack-Size Adjustments.