WASHINGTON, DC – National Foreign Trade Council (NFTC) Vice President for International Tax Policy Anne Gordon issued a statement in response to India’s decision to repeal its digital services equalization levy following Parliament’s passage of the Finance Bill, 2025 earlier today:
“We welcome India’s decision to remove its tax on digital advertisements which had been in place since 2016. We appreciate the Indian government’s willingness to change course on this policy and to continue working together with the United States to strengthen our economic relationship and our companies’ ability to compete in their domestic market.
“We commend the Trump Administration for its continued focus on the success of American companies and addressing clearly discriminatory foreign treatment. We urge other countries to follow India’s example and work with the administration to roll back tax policies that unfairly target U.S. companies or limit their ability to compete internationally.”
Background:
In the Finance Bill, 2016, chapter VII, sections 163 to 180, India implemented a 6% “equalization levy” (a type of a digital services tax) effective June 1, 2016. This equalization levy was a gross basis tax imposed on online advertisement services of non-resident entities, which primarily impacted U.S.-based companies. The Finance Bill, 2020 implemented a second equalization levy of 2% on the services of non-resident e-commerce operators effective on April 1, 2020. As part of the Finance (No. 2) Bill 2024, the 2% levy was removed in August 2024. The 6% levy on online advertisement services remained in place until it was revoked by the Indian Parliament earlier today.
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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.
