The office of the U.S. Trade Representative (USTR) Katherine Tai said that the tariff proposed on goods from Austria, India, Italy, Spain, Turkey, and the U.K. was approved following a “Section 301” investigation that found these digital taxes to be discriminatory. In the case of India, that was a mere 2% digital service tax on trade and services by non-resident e-commerce operators with a turnover of over ₹2 crore. Even more, Washington appears to be unafraid to throw serious political heft behind this venture even to the point of risking another tariff war outbreak, compounding the tensions generated by tax skirmishes between the Trump White House and Beijing on this count. The cost for India could be potentially high, as $118 million worth of its exports will fall under this proposed tariff, and a range of sectors could be impacted. At this point in the fragile, post-COVID-19 recovery, the world can hardly afford another tariff war, and that too one waged to protect a sector that has enjoyed low-tax or tax-free operations across the world for decades.

Source: The Hindu June 03, 2021 18:33 UTC