Jammu, Jan. 21 -- In its findings on the Section 301 probe conducted under the US Trade Act, 1974, the US Trade Representative (USTR) hasinter aliaconcluded that India's digital services taxes (DST) or the so-called equalisation levy (EL) at the rate of two per cent, unfairly targets US companies. The USTR raised three aspects that, it alleges, are inconsistent with global tax principles: First, the levy on US companies has extra-territorial application; second, DST is a tax on the firm's revenue, not its income; and third, it subjects US companies to double taxation.

The above findings could lead to the US imposing duties on Indian goods; restrictions on import of goods and services; restrictions/denial on issuance of service sector aut...