It is expected that the New Delhi will likely approach the United States Trade Representative (‘USTR’) with a proposal to drop the ‘retaliatory’ taxes or tariffs, applicable to shipments concerning some Indian products to the U.S.
This comes days after the USTR proposed a retaliatory trade action of up to 25% tariffs on Basmati rice, sea foods and gold against India for imposing the equalisation levy on certain U.S. Companies. The U.S. has objected to India which unilaterally slapped an equalisation levy tantamount to 2% on digital transactions of multinationals that are essentially outside the ambit of tax treaties.
Under the Base Erosion and Profit Sharing Framework (‘BEPS’) large economies excluding the U.S. have come under one umbrella to tax the global income of digital companies. The U.S. had refused to be a part of BEPS stating that it targets large American Multi National Corporations like Amazon, Facebook, Google. It would be interesting to note whether the U.S would change its stance or not?
Source- Economic Times