wordpress blog stats
Connect with us

Hi, what are you looking for?

US proposes taxing Indian goods in retaliation to equalisation levy regime

taxes, calculator

We missed this earlier: The Office of the United States Trade Representative (USTR) has proposed retaliation against India and other countries that have proposed or implemented digital service taxes (DST)/equalisation levy regimes. The USTR has issued notices seeking comments from six countries — India, Austria, Italy, Spain, Turkey and the United Kingdom.

As retaliation, the USTR has suggested the imposition of 25% ad valorem taxes on the import of a range of products from India including sea-food, basmati rice, bamboo articles, rattan furniture jewellery, pearls, and semiprecious stones.

These taxes will supposedly fetch the US government around $55 million, the amount the Indian government will reportedly collect from US-based companies through the equalisation levy.

Katherine Tai, the incumbent USTR, said in a statement that while the US is committed to reaching an international consensus through OECD on international tax issues, it will continue to take actions under Section 301 of the US’s Trade Act and even impose tariffs when necessary.

At the start of the year, the USTR — under the Trump administration — had published a report criticising India’s decision to impose an equalisation levy of 2% on digital services. The report called the levy “discriminatory on its face”, adding that the Indian law explicitly targets non-Indian forms. In a rebuttal, the Indian government defended itself by saying the equalisation levy was only to ensure fair competition and to exercise the ability to tax businesses with a close nexus to India.

In the investigation document pertaining to India, the USTR has asked the Indian government and other stakeholders to submit written comments before April 30, 2021 on potential trade actions. It said that it will also allow for hearings on rebuttals, presumably from the Indian government. Presently, it ask asked for comments on how India’s DST will impact US-based companies, including their compliance burden, and whether the inclusion products on whom the tariffs could be imposed is justified.

Advertisement. Scroll to continue reading.

Also read:

You May Also Like


In a report on global trade barriers in 2021, the Office of the United States Trade Representative (USTR) cited data localisation and the 2%...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ