US tech firms are planning to ask for the postponement of the digital tax that will be applicable to them, citing the reasons of the Coronavirus outbreak.
Nine lobbying groups including the US Chamber of Commerce have asked India to defer the digital tax in a letter to the Finance minister.
Find out all the details about the digital tax right here!
Global Lobbying Groups Ask India To Postpone New Digital Tax Due To Coronavirus
Nine lobbying groups, which are based out of the United States, Europe, Asia, and Australia penned a combined letter to the Finance Minister of India, Nirmala Sitharaman, requesting a deferment on the new Indian Digital Tax. Other than the US Chamber of Commerce, the signatories also include the Washington-based Information Technology Industry Council, the Asia Internet Coalition, and DigitalEurope.
They have explained that the Coronavirus pandemic has caught them off guard and they are all battling the fallout caused by the disease.
The government of India recently announced that starting from April 1, all the foreign billings for digital services that will be provided in the country will have a 2 % tax, which will be called the Digital Tax. For those who dont know, foreign billings are where companies take the payment abroad for a service that is provided to the people in India.
The letter states, “The timeframe within which this expansive new measure was approved and entered into force allowed for neither the dialogue nor the significant structural changes that would be necessary (for companies to comply).”
It also states that India is a critical market in which many of the members are sincerely invested.
Trade Relations Between India And the US To Worsen?
As per reports, this tax will further worsen the trade relations between India and other countries such as the US.
Roger Murry of the Alliance for Fair Trade with India, a group of U.S. trade associations, said, “The new levy came out of nowhere … It will disrupt India’s trade relations perhaps in ways the drafters of the levy did not anticipate.”
Google is also concerned that it will not be able to identify the countries where advertising arrangements were done keeping Indian users in mind. This will result in an increase in the requirement of technological and compliance requirements.
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