USTR has issued notices searching for public feedback on proposed commerce actions in opposition to six international locations
The United States Trade Representative (USTR) has proposed retaliatory commerce actions in opposition to India and sure different international locations which have imposed or are contemplating equalisation levy/digital providers tax on e-commerce firms. It has issued notices searching for public feedback on proposed commerce actions in opposition to six international locations, together with India. The USTR, in an announcement, stated it “is proceeding with the public notice and comment process on possible trade actions to preserve procedural options before the conclusion of the statutory one-year time period for completing the investigations.”
According to a USTR doc pertaining to India, it has requested “written comments regarding a potential trade action in connection with the Section 301 investigation of India’s Digital Services Tax.” On this, sources within the authorities on Saturday stated India will look at the proposed motion with the stakeholders involved and would take appropriate measures, preserving in thoughts the commerce and industrial curiosity of the nation and general curiosity of its individuals.
In June 2020, the US initiated an investigation underneath Section 301 of the US Trade Act, 1974 in opposition to the taxation on digital providers adopted or into consideration by India, Italy, Turkey, UK, Spain and Austria. The report of this investigation in January this 12 months concluded that India’s equalisation levy, by its construction and operation, discriminates in opposition to US digital firms. It was strongly opposed by India.
The US had requested for bilateral consultations on this matter, and India had submitted its feedback to the USTR on July 15, 2020. It had additionally participated in a bilateral session held on November 5, 2020. “Consequent to the determination and findings, now USTR has proposed a retaliatory action under Section 301 against India”s equalisation levy, along with other countries,” a supply stated.
USTR Katherine Tai has acknowledged that the US is dedicated to working with its buying and selling companions to resolve its issues with digital providers taxes and handle broader problems with worldwide taxation. “The US remains committed to reaching an international consensus through the OECD process on international tax issues. However, until such a consensus is reached, we will maintain our options under the Section 301 process, including, if necessary, the imposition of tariffs,” Tai has stated.
According to the USTR doc, the proposed motion contains imposition of further advert valorem tariffs on sure merchandise from India, reminiscent of sea meals, bamboo merchandise, semi-precious and valuable stones, furnishings, cork, and cigarette papers.
“In particular, USTR proposes to impose additional tariffs of up to 25 per cent ad valorem on an aggregate level of trade that would collect duties on goods of India in the range of the amount of DST (digital services tax) that India is expected to collect from US companies,” it stated.
Initial estimates point out that the worth of the DST payable by US-based firm teams to India will probably be as much as about USD 55 million per 12 months, it added. India has earlier acknowledged that the equalisation levy isn’t discriminatory and solely seeks to make sure a level-playing discipline with respect to e-commerce actions undertaken by entities with everlasting institution in India.
It was additionally clarified by India to the US that the levy was utilized solely prospectively, and has no extra-territorial software, since it’s based mostly on gross sales occurring within the territory of India by digital means.Â
