Digital tax: USTR promotes retaliatory action against India, 5 countries

Digital tax: USTR promotes retaliatory action against India, 5 countries

Digital tax: USTR promotes retaliatory action against India, 5 countries

Washington / New Delhi : The United States Trade Representative (USTR) has recommended a retaliatory action against India and other countries who have set or considered a tax rating for e-commerce companies' services.

It has issued notices seeking public comment on proposed trade actions against six countries, including India.

The USTR, in a statement, said it was "continuing with the public notice and comment process on possible commercial measures to maintain the procedures before the end of the one-year legal deadline to complete the investigation".

Digital tax: USTR promotes retaliatory action against India, 5 countries

Digital tax: USTR promotes retaliatory action against India, 5 countries

According to a USTR document relating to India, he has requested "written comments regarding the potential commercial action in connection with the investigation of Section 301 of the Digital Digital Tax Service of India."

In this regard, sources in the government on Saturday said India would consider the proposed action with the relevant stakeholders and would take appropriate action, taking into account the country's trade and commerce and the interests of its people.

In June 2020, the US launched an investigation under Section 301 of the US Trade Act, 1974 against a tax on digital services accepted or considered by India, Italy, Turkey, the UK, Spain and Austria.

The report of the investigation in January this year concluded that India's equity tax, by its structure and performance, discriminates against US digital companies.

It was strongly opposed by India.

The United States has called for a two-state solution, and India has submitted its views to the USTR on July 15, 2020. It also participated in the bilateral talks held on November 5, 2020.

"As a result of the cuts and findings, the USTR has now filed a retaliatory action under Section 301 against the equality tax of India, and other countries," the source said.

USTR Katherine Tai states that the US is committed to working with its business partners to resolve their concerns about digital services taxes and to address broader international tax crises.

"The US remains committed to reaching an international agreement on OECD in international tax matters. However, until such an agreement is reached, we will retain our options under Section 301, including, if necessary, the imposition of tariffs," Thai said. .

According to a USTR document, the proposed action includes the inclusion of additional advertising revenue on certain products from India, such as seafood, bamboo products, scarce and precious stones, furniture, cocoa paper and tobacco. PTI