The US has already scrapped zero duty preference on some Indian imports

WASHINGTON (TIP): After the US scrapped zero duty preference on some Indian imports and arm-twisted India into purchasing shale oil, Washington has now started a probe into digital services taxes, either adopted or being considered by 10 countries including India.

The United States Trade Representative (USTR) will conduct the probe under Section 301 of the Trade Act.

India, however, will get the opportunity to defend the tax.

India is no stranger to the USTR investigations, having been probed several times on various grounds.

“US President Donald Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies. We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination,” said USTR Robert Lighthizer in a statement.

Four years back, India levied six per cent tax on for advertisements hosted on offshore businesses such as mobile phone apps, social media platforms and digital content streaming services.

This was fine with the USTR, but it has opposed the latest Union Budget expanding the scope of the equalization levy (tax) to revenues generated by non-resident e-commerce firms operating in India.

Though the levy is two just two per cent, the US is keen on a probe.

(Agencies)