India does not agree with USTR’s report on ecommerce tax: Commerce Secretary

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Updated: February 03, 2021 3:12 PM

Last month, an USTR investigation has concluded that India's 2 per cent digital services tax on e-commerce supply discriminates against US companies and is inconsistent with international tax principles.

us india trade relationsSome countries are protesting because they have huge domination in that kind of activity, he added. (Representational image: Reuters)

India does not agree with the United States Trade Representative (USTR) report that the country’s two per cent equalisation levy on foreign e-commerce firms discriminates against American companies, Commerce Secretary Anup Wadhawan said on Wednesday.

Last month, an USTR investigation has concluded that India’s 2 per cent digital services tax on e-commerce supply discriminates against US companies and is inconsistent with international tax principles.

“We do not agree with that conclusion,” Wadhawan told reporters when asked whether India has responded to the USTR report.

“Basically, if there is an economic benefit from a certain jurisdiction then there has to be some taxation in that jurisdiction…OECD (Organisation for Economic Co-operation and Development) is also moving in that direction that if you have an economic presence and economic gain, then you must have taxation in that jurisdiction. You have billions of dollars of revenue in a certain jurisdiction, you have to pay taxes,” he said.

Some countries are protesting because they have huge domination in that kind of activity whether it is Facebook or Google or Amazon, he added.

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