Highlights:
- India imposed a digital tax on companies including Amazon and Google
- The decision has been conveyed to the US Trade Department which has started a probe
The Indian Government has decided to levy a tax on companies which deals in digital services in India and clarifies that the tax is not aimed at any single country and the decision will not be reconsidered, people with knowledge with the scenario has said.
This decision has been forwarded to the US Trade Department which has now initiated a probe alleging the South Asian nation was targeting companies including Facebook, Amazon, Google, the people said requesting anonymity as they are not allowed to speak to the press yet.
A news report said, “India’s stand on the levies comes as the two nations engage in negotiations to achieve a limited trade deal with ambitions for a free trade agreement in the future.” The same report added, “A similar dispute in France, prompted the U.S. to levy 25% tariffs on a series of French goods worth about $1.3 billion, last week.”
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“A call made to the trade ministry spokesman outside office hours was not immediately answered, while the U.S. Embassy in New Delhi referred the query to the U.S. Trade Representative’s office. An email sent to a USTR spokesperson for comment remained unanswered.” said the report.
The South Asian nation is among 10 more countries which are facing U S investigations to assess if the levies were discriminatory against the American tech giants. In the French case, the tariff on goods which included handbags and makeup will take effect in around 180 days or 6 months since the French government is yet to collect the digital tax.
Union Finance Minister, Nirmala Sitharaman announced the tax – equalization levy – in the budget of February which was implemented on the 1st April 2020 and applies on to the non-resident companies which are selling goods and services in India.
It is an additional safeguard against the loss of revenue in India due to activities of e-commerce operators in the country, the people said.
