Geneva based think tank lobbies for imposing import duty in India on digital items such as movies and video games

10 Jun 2022 , 04:12 PM

A Geneva-based think tank(group) has estimated India’s potential revenue loss from not taxing digital imports  at $1.5 billion in 2020 and $4.9 billion in 2017-20, based on bound rates, ahead of a major WTO ministerial conference next week (the ceiling tariffs committed by respective countries).
 
The income loss was attributed to imports of items such as  movies, music, and video games, according to a study document published by South Centre, an international organization of developing nations. Customs duties would be used to “control conspicuous consumption through imports,” according to the study report.
 
Since an interim moratorium was imposed in 1998, World Trade Organisation (WTO) members have been unable to apply customs taxes on electronic transmissions, which India has resisted.
 
According to the report, India lost $796 million in income in 2020 and $2.55 billion in 2017-20 due to imposed tariffs (the charges that nations actually levy).
 
Developing and least developed nations are losing income through tariffs, particularly at a time when imports of digitized products have increased as a result of the epidemic.
 
“Not only are they losing budgetary space, but they are also losing regulatory space,” according to the report, “since they are unable to supervise the expanding imports of digitizable products, particularly luxury commodities like movies, music, and video games.”
 
According to a UNCTAD analysis issued in 2019, India’s income loss is greater than $500 million.
 
“This demonstrates how the income loss as a result of the moratorium is increasing,” a government official said. According to the South Centre analysis, developing nations and LDCs lost $56 billion in tariff income from 2017 to 20.
 
“With no clarity on the definition of electronic transmissions (ET) and thus on the scope of the moratorium, the continuation of the WTO moratorium on customs duties on ET can lead to substantial tariff revenue losses for developing and least developed countries in the future,” it said, noting that the loss is from only 49 products (at HS six-digit).
 
China, Indonesia, Pakistan, Russia, and South Africa have lost more than $100 million, while India, Mexico, Nigeria, and Thailand have lost more than $1 billion.