'USTR's investigation against India's digital services tax isn't intimation of tariffs or other punitive measures'
Jun 03, 2020
New Delhi [India], June 3 : Any investigation initiated by the United States Trade Representative (USTR), the digital services tax adopted or are being considered by a number of countries, including India, against American tech companies is not an intimation of tariffs or other punitive measures, informed government sources on the matter told ANI on Wednesday.
"US law mandates consultation with the alleged party - in this case, the Government of India - hence India will have the opportunity to defend its taxation policy," the government sources said.
"The announcement by US Trade Representative on Section 301 probe into India's equalization levy is merely first step initiation and in no way represents definitive action against the Indian government. Moreover, this isn't an intimation of tariffs or other punitive measures on India," they added.
"It should be noted that this action by USTR is not targeted against India, instead this targets policy of digital taxation that has emerged in a number of countries including Austria, Brazil, Czech Republic, European Union, India, Indonesia, Italy, Spain, Turkey and the United Kingdom," the sources added further.
On June 2, the USTR announced that his office is beginning investigations into digital services taxes that have been adopted or are being considered by a number of our trading partners.
The investigations, he said, will be conducted under Section 301 of the 1974 Trade Act. This provision gives the USTR broad authority to investigate and respond to a foreign country's action which may be unfair or discriminatory and negatively affect U.S. Commerce.
A Federal Register notice was also issued following the announcement providing details of the investigations as well as information on how members of the public can provide their views through written submissions.
"President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies," said USTR Robert Lighthizer on Tuesday.
"We are prepared to take all appropriate actions to defend our businesses and workers against any such discrimination," he added.
