Four years of India’s New Tax Regime (GST) and its impact on India’s International Trade : A critical Review

The introduction of the Goods and Services Tax (GST) is a significant reform in the field of the indirect tax system in the country. It was a single tax system instead of multiple tax systems levied by the center and state government. GST has come into force on 1 July 2017 and completed four years of its implementation. GST reform in India is expected to improve the specialization in the production of goods and services among the major economic sectors of India by removing distortion in the production and distortions of goods and services, transparency in the tax system which help to maintain the seven percent GDP growth rate (Bhattarai Keshab (2017).Goods and Services Tax is basically a destination-based consumption tax levied on goods and services (Bhushan Satya). New tax reform imposed by the new government certainly increases the efficiency of allocation of resources which not only increases the rate of economic growth but also redistributes the income equally among the weaker section of the society (Panagariya 2017). The expected benefits from the implementation of the GST to reduce the cascading effect of taxes i.e. remove tax on tax.After the implementation of GST, has made a significant impact on India’s international trade as it brought changes in the structure of export and import taxes and withdrew various indirect taxation. The economic growth of a country is determined by its foreign trade. With the introduction of GST on 1 July 2017, it was expected to boost up India’s international trade.The objective of the study is to analyze the four years of India’s new tax regime. This paper further tries to examine the effects of GST on India’s merchandise trade and services trade. The paper also tries to find out the impact of GST on India’s international trade.Finally, the study tries to conclude that how it would be disrupted and benefits the economy in the long run