USTR announces Section 301 investigation against digital services taxes

The US Trade Representative’s office (USTR) has announced that it will start Section 301 investigations against India and nine others for imposing or considering digital services taxes that may affect American companies. According to the USTR office, it will conduct the investigation under the Section 301 of the Trade Act of 1974. This law authorises authorities to initiate action, including punitive tariffs, in response to a foreign country’s action that is deemed unfair or discriminatory and curbs American trade. India adopted a 2 per cent digital services tax in March. According to USTR, the tax applies only to non-resident companies, and covers online sales of goods and services to, or aimed at, persons in India. The tax applies only to companies with annual revenues in excess of approximately Rs 20 million. The tax went into effect on April 1. Tax expert Mukesh Butani said that the provision (of 2 per cent levy) needs clarity on various counts. According to a report in Business Standard, the action is not specific to India and would not impact trade talks between India and USA.

References
1. https://economictimes.indiatimes.com/news/economy/foreign-trade/us-to-probe-google-tax-among-levies/articleshow/76187094.cms
2. https://www.financialexpress.com/industry/digital-tax-row-us-probing-google-tax-by-india/1980246/
3. https://www.business-standard.com/article/economy-policy/us-probe-into-india-s-digital-tax-not-a-move-of-aggression-says-official-120060300653_1.html
4. https://www.thehindubusinessline.com/economy/macro-economy/ustr-announces-section-301-investigation-against-indias-digital-services-taxes/article31736248.ece
CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
7.0 -0.7
Consumer Sentiments Index
Base September-December 2015
59.9 +1.2
Consumer Expectations Index
Base September-December 2015
61.2 +1.0
Current Economic Conditions Index
Base September-December 2015
57.9 +1.6
Quarterly CapEx Aggregates
(Rs.trillion) Mar 21 Jun 21 Sep 21 Dec 21
New projects 2.36 2.74 2.25 2.51
Completed projects 1.17 0.74 1.18 1.53
Stalled projects 0.28 0.33 0.03 0.03
Revived projects 0.23 0.12 0.28 0.39
Implementation stalled projects 0.34 0.38 0.25 0.65
Updated on: 19 Jan 2022 8:28PM
Quarterly Financials of Listed Companies
(% change) Mar 21 Jun 21 Sep 21 Dec 21
All listed Companies
 Income 15.1 39.2 27.9 17.0
 Expenses 7.4 38.6 27.3 18.0
 Net profit 337.8 142.5 52.7 12.8
 PAT margin (%) 8.8 9.0 9.6 19.4
 Count of Cos. 4,401 4,495 4,546 145
Non-financial Companies
 Income 17.8 56.1 36.1 18.9
 Expenses 10.7 57.1 36.6 22.3
 Net profit 222.4 199.3 59.5 4.9
 PAT margin (%) 9.0 8.5 8.8 17.7
 Net fixed assets 2.3 4.9
 Current assets 4.3 11.0
 Current liabilities 1.2 0.9
 Borrowings -4.5 12.2
 Reserves & surplus 11.7 12.4
 Count of Cos. 3,247 3,301 3,304 104
Numbers are net of P&E
Updated on: 19 Jan 2022 8:28PM
Annual Financials of All Companies
(% change) FY19 FY20 FY21
All Companies
 Income 13.4 0.6 -1.5
 Expenses 13.8 0.4 -4.1
 Net profit 12.7 -6.9 62.0
 PAT margin (%) 2.0 2.1 5.7
 Assets 9.9 8.8 10.7
 Net worth 8.2 4.5 13.3
 RONW (%) 3.6 3.5 8.2
 Count of Cos. 32,530 31,471 11,634
Non-financial Companies
 Income 14.2 -1.2 -3.0
 Expenses 14.3 -0.9 -5.3
 Net profit 22.1 -21.1 49.3
 PAT margin (%) 2.8 2.3 5.3
 Net fixed assets 6.0 11.2 1.5
 Net worth 7.8 2.2 11.0
 RONW (%) 6.3 4.9 9.1
 Debt / Equity (times) 1.0 1.1 0.8
 Interest cover (times) 2.2 1.9 2.8
 Net working capital cycle (days) 74 81 80
 Count of Cos. 25,943 25,015 8,657
Numbers are net of P&E
Updated on: 18 Jan 2022 2:48PM