The US Trade Representative's (USTR) office will also conduct the Section 301 probe against nine others, including Austria, Brazil, Indonesia, Italy, Spain, Turkey, the Czech Republic, the UK, and the EU, for levying or considering digital services taxes "discriminating against US companies".
US proposal to raise the global corporate tax rate to 28% from 21% might face resistance from countries unwilling to give up their edge and compete with America on its terms.
The government is studying suggestions on checking instances of double non-taxation and 'treaty shopping'
In a bid to provide a level playing field, the government has decided not to levy 2 per cent digital service tax if goods and services are sold through Indian arm of foreign e-commerce players.
Under the amended treaty with Mauritius, for two years beginning April 1, 2017, capital gains tax will be imposed at 50 per cent of the prevailing domestic rate.
Multinational companies operating in India will soon have to disclose details of their operations at the country of residence and their revenue income to the Income Tax authorities.
Currently, companies are taxed in the jurisdictions in which they have a physical presence. However, digital businesses generate revenues from markets without a significant physical presence in a country.
The government said that far from targeting any US entity, the purpose was to ensure fairness, healthy competition, and to exercise the ability of governments to tax businesses having a nexus with the Indian market through digital operations.
The US is pressing for taxing digital economy through the 'marketing intangibles' principle and the UK through a 'user-base' principle.
E-commerce giants such as Amazon, Netflix and Flipkart, whose headquarters are not in India, potentially have to pay the additional levy of 2 per cent from April 1.
A total of Rs 396 crore has been mopped up, as on August 20 against Rs 407 crore collected in the same period last year. This was despite the expansion of the levy to online e-commerce players from this financial year.
The Indian mrime minister supported a new global standard on automatic exchange of tax information
It accounted for over a third of foreign direct investment flows into India between 2000 and 2015
Decoding four important provisions in the Finance Bill 2018.
The amendment would help check round-tripping of funds and boost the domestic consumption, Jaitley added
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