Two American shrimp trade associations have requested to appear at a hearing next month the Office of the U.S. Trade Representative (USTR) will hold regarding actions the United States may take in response to a tax India has levied against digital goods.
India, the world’s second-most populous nation, has imposed a 2 percent “digital services tax” on revenue generated by “non-resident” companies on a wide array of technological services, including sales of software-as-a-service products. The USTR started an investigation into the services tax last June, and in January the agency found that India’s action discriminated against American commerce.
While it may not seem that seafood companies would have a stake in the debate, federal law allows the trade representatives to impose duties on goods from the country under investigation.
“In particular, USTR proposes to impose additional tariffs of up to 25 percent ad valorem on an aggregate level of trade that would collect duties on goods of India in the range of the amount of DST that India is expected to collect from U.S. companies,” said the agency in a 30 March 2021 statement appearing in the Federal Register.
The U.S estimates that India will receive about USD 55 million (EUR 45.5 million) from U.S.-based companies annually.
Among the products the U.S. is targeting in response are three shrimp product lines, two of which are cold-water products.
However, Southern Shrimp Alliance Executive Director John Williams said in a letter sent to the USTR a more appropriate response would be to place a 2 percent tariff on all eight shrimp product lines.
“The Southern Shrimp Alliance agrees with and fully supports the USTR’s proposal to apply additional duties to imports of Indian shrimp,” Williams wrote. “However, the Southern Shrimp Alliance believes that the imposition of a 25 percent additional ad valorem duty on Indian imports made through just three of the seven HTSUS subheadings covering shrimp products will likely lead importers to re-classify merchandise to the shrimp subheadings not subject to additional duties.”
Just a 2 percent tax, Williams added, would be “on par” with the amount U.S. businesses would pay for India’s digital tax.
Similarly, David Veal, executive director of the American Shrimp Processors Association (ASPA), has also requested to testify.
In a letter submitted by the association’s counsel, Veal wants the USTR to add warm-water shrimp to the products to be taxed.
The hearing is scheduled for 10 May, 2021.
Photo courtesy of CSPAN
