New Delhi, Jan. 20 -- India's goods and services tax (GST) framework has a structural timing asymmetry that disproportionately burdens micro and small enterprises. While tax liability is triggered at the point of invoicing, cash realization for many entities occurs months later. In an economy where extended credit terms are routinely imposed by larger clients, this design choice compels smaller firms to remit tax on income that remains unrealized, effectively transferring working capital from the weakest balance sheets to the strongest.

Payment cycles of 90-120 days are routine in most sectors. These terms are not negotiated on an equal footing. They are imposed by buyers with scale, bargaining power and access to capital. Small supplier...