The United States has noted that India’s digital service tax is discriminatory and may adversely affect American enterprise. In addition, it has been mentioned that action will be taken under its commerce regulation. The Trump administration left responsibility for action under Section 301 of the US Trade Law to the upcoming Biden government.
The US Trade Representative (USTR) mentioned that it approached the Indian government on the matter on November 5, 2020, according to a report published within the Federal Register after investigating the Digital Service Tax (DST) case. India noted in the last week on Thursday that the 2% digital tax does not discriminate against US corporations as it applies to all foreign e-commerce corporations, irrespective of any nation.
The USTR has referred to the digital service tax as a burden on US corporations within the report. Digital service tax levies 2 per cent tax on income earned from digital providers made available in India. This tax is levied on migrant corporations. This tax is effective from April 1, 2020.