New Delhi: The US on Wednesday introduced tariffs on six countries, together with India, which have imposed or are contemplating equalisation levy/digital companies tax on e-commerce firms however instantly suspended the taxes for as much as six months to supply additional time to finish the continuing multilateral negotiations on worldwide taxation on the OECD and G20.
United States Trade Representative (USTR) Katherine Tai, in an announcement, introduced the conclusion of the one-year Section 301 investigations of Digital Service Taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey and the UK.
(*5*) the assertion stated.
In March final yr, the USTR has proposed retaliatory commerce actions in opposition to India and sure other countries which have imposed or are contemplating equalisation levy/digital companies tax on e-commerce firms.
USTR has proposed to impose additional tariffs of as much as 25 per cent advert valorem on an mixture stage of commerce that might gather duties on Indian items within the vary of the quantity of DST that India is predicted to gather from US firms.
On the announcement, authorities sources in New Delhi stated the postponement of tariffs is much like the DST investigation on France, the place USTR indefinitely postponed tariffs after the primary six month delay to pursue negotiations on the OECD.
Further, Tai acknowledged that the US is targeted on discovering a multilateral answer to a spread of key points associated to worldwide taxation, together with its considerations with digital companies taxes.
“The US remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future,” she stated.
On June 2, 2020, USTR initiated investigations into DSTs adopted or into account in 10 jurisdictions, together with India.
In January this yr, following complete investigations, USTR alleged that the taxes adopted by these countries discriminate in opposition to US digital firms and had been inconsistent with rules of worldwide taxation.
India has earlier acknowledged that the equalisation levy just 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 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 means of digital means.
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