Updated:
February 12, 2021 12:02 IST
It is not contrary to international tax principles and does not discriminate particularly against U.S. firms
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Last month,
found India’s Digital Services Tax (DST) to be discriminatory. It said the tax is “inconsistent with prevailing principles of international taxation”, and burdens or restricts U.S. commerce. India has denied these charges. The bone of contention is a 2% tax that India has charged since April 2020 on revenues from digital services, applicable only to non-resident companies. In a discussion moderated by Sriram Srinivasan, Suranjali Tandon and Nikhil Kapoor discuss this issue. Edited excerpts:
India introduced a 6% equalisation levy in 2016. From then to taxing a broader basket of online services in 2020, how do you view what India has done, especially in the context of the rest of the world?