India’s 2% equalisation levy discriminatory, unilateral: US

New Delhi: The United States Trade Representative (USTR) has determined that digital services taxes adopted by India discriminated against American companies and were inconsistent with international tax principles, but stopped short of taking specific actions, saying it ‘will continue to evaluate all available options’. The Indian government said it would examine the determination and decision notified by the US, and take appropriate action keeping in view the overall interest of the nation.

The USTR, in a report issued Wednesday, said India’s 2% equalisation levy is imposed on revenue generated from a broad range of digital services offered in the country, including digital platform services, digital content sales, digital sales of a company’s own goods, data-related services, software-as-a-service, and several other categories of digital services and applies only to “nonresident” companies.