(Video) Rajya Sabha TV (RSTV) The Big Picture: Tax on Digital Services

Topic: Tax on Digital Services

Guest:

Dr. Subhash Chandra Pandey, (Former Special Secretary & Financial Advisor, Ministry of Commerce and Industry, GoI)
Sunil Garg, (Tax Expert)

Topic Description:

The United States has proposed retaliatory trade actions against India and certain other countries that have imposed or are considering digital services tax on e-commerce companies. The United States Trade Representative (USTR) has proposed to impose retaliatory tariffs up to 25 per cent on a wide variety of Indian products ranging from shrimps and basmati rice to gold and silver items, on grounds that India’s digital services tax, also known as equalisation levy or Google tax, is unreasonable or discriminatory and burdens or restricts US trade. As per the USTR report, initial estimates indicate that the value of the digital services tax payable by US-based company groups to India will be up to approximately $55 million per year, indicating that the retaliatory tariffs could add up to the amount. Companies affected by the 2 per cent equalisation levy include Google, Amazon, Linkedin and Facebook. Similar action has been proposed against Turkey, Italy, the UK, Austria and Spain. According to news reports, the government will examine the proposed action with the stakeholders concerned and would take suitable measures, keeping in mind the trade and commercial interest of India and its people.