U.S. DELAYS TARIFF ON INDIA OVER DIGITAL TAX ISSUE

WASHINGTON: The US government announced Wednesday it is suspending for six months any punitive tariffs on Britain, India and four European nations while it works to resolve a dispute over digital services taxes. “The US is focused on finding a multilateral solution to a range of key issues related to international taxation,” US Trade Representative Katherine Tai said. The suspension comes at the conclusion of a probe into taxes which Washington said discriminated against companies like Apple, Amazon and Google.

NEW DELHI: The US on Wednesday announced ‘suspended’ additional tariffs on certain goods from India and five other countries it has deemed at the conclusion of a year-long probe to have adopted digital services taxes (DSTs) that are discriminatory against its businesses.

The new tariffs will come into effect only after 180 days, giving time for negotiations under way at the G-20 group of countries and the Organization for Economic Cooperation and Development (OECD), the office of the top US trade representative (USTR) said in an announcement.

“The US is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with DSTs,” said USTR Katherine Tai.

“The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future.” she added.

The US launched a comprehensive Section investigation into digital services taxes adopted by nine countries and one jurisdiction in June 2020: India, Austria, Brazil, the Czech Republic, Indonesia, Italy, Spain, Turkey, the UK, and the European Union,

In January 2021, the USTR concluded that the DSTs in India, Austria, Turkey, UK, Italy and Spain, “discriminated against the United States digital companies, were inconsistent with principles of international taxation, and burdened US companies”.

In March, the USTR announced trade actions against these six entities and kicked of a public-notice and comment period, with hearings.

In April, the US also invited comments and announcing a hearing into the investigation related to India.