On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16824) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of India's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.
Comments are due by April 30, 2021.
India has adopted a DST that imposes a two percent tax on revenue generated from a broad range of digital services offered in India, 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. India’s DST only applies to ‘‘non-resident’’ companies.
On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that India's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))
USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from India.
The list published at 86 FR 16824 is quite extensive and contains the articles of protential interest to clients of Agathon Associates.