United States says India’s digital services tax is discriminatory

The US has determined that India’s Digital Services Tax is discriminatory and has an adverse impact on American commerce and is actionable under the trade act.

At the same time, the outgoing Trump administration has left the onus of taking any action against India under Section 301 of the US Trade Act to the incoming Biden administration.

Publishing the results of the investigation on the Digital Service Tax (DST) in the Federal Register on Tuesday, the US Trade Representatives (USTR) said that it had consultations with the Indian Government on the issue on November 5, 2020.

Responding to the outgoing Trump administration’s move, India on Thursday said the two per cent equalisation levy does not discriminate against US companies as it applies equally to all non-resident e-commerce operators irrespective of their country of residence.