Amidst Corona's havoc, the Digital Service Tax (DST) imposed on Indian companies such as Google and Amazon in India is not acceptable to the US. The US has said that they will investigate the proposed DST in 10 countries including India. America argues that these countries are discriminating against American companies in imposing DST. The notice has been issued include Australia, Brazil, European Union, Italy, Indonesia, Spain, Turkey and the UK, including the United States Trade Representative (USTR), to initiate an inquiry into the Digital Service Tax.
Last year France had decided to impose digital service tax on American tech companies. In response, the US threatened to impose an additional tax on France's exports. After that France has postponed the digital service tax till 2021. India has introduced e-commerce transaction tax in the budget this year. From April 1, digital service tax has started to be levied on e-transactions.
According to the ministry sources regarding this matter, India does not intend to change or withdraw its tax system at present. Experts say that America has given notice for investigation. It is in a very early stage. America is going to make a decision soon. Everything will depend on what comes out in the investigation by the US.