Daily Current Affairs for UPSC Civil Services Exam – 08 January 2021

In Today’s News:

  1. Equalisation Levy and India’s response to S 301 of US.
  2. India to chair 3 subsidiary bodies of UNSC.

1. Equalisation Levy and India’s response to S 301 of US

News Summary

The office of USTR on 6th Jan 2021 released its findings on the section 301 investigation into India’s Digital Services Tax (DST) and concluded that India’s DST -the equalization levy – is discriminatory and restricts US commerce. Similar determinations were also made against Italy and Turkey on 6th Jan 2021, itself. In this regard, India gave its response to the S 301 report of the U.S. on Equalisation Levy.

Prelims GS – Economic Development

Equalisation Levy:
  • The Equalisation Levy introduced by the Finance Act 2016, was charged at 6% on certain online advertising and related services. (Note: 2018 UPSC Prelims Question)
  • The Finance Act 2020 amended the Finance Act 2016, introducing a new Equalisation Levy at 2% on the consideration received/receivable by the e-commerce operators.
  • Now, Equalisation Levy is levied at 2%.
  • EL is applicable to non-resident e-commerce operators, not having a permanent establishment in India.
  • The threshold for this levy is Rs. 2 crores, which is very moderate and applies equally to all e-commerce operators across the globe having business in India.
  • The levy does not discriminate against any U.S. companies, as it applies equally to all non-resident e-commerce operators, irrespective of their country of residence.
  • There is no retrospective element as the levy was enacted before the 1st day of April 2020 which is the effective date of the levy.
  • It does not have extraterritorial application as it applies only to the revenue generated from India.
  • In addition, EL was one of the methods suggested by the 2015 OECD/G20 Report on Action 1 of the BEPS Project which was aimed at tackling the taxation challenges arising out of digitization of the economy.
  • The purpose of the Equalization Levy is to ensure fair competition, reasonableness, and exercise the ability of governments to tax businesses that have a close nexus with the Indian market through their digital operations.
  • It is a recognition of the principle that in a digital world, a seller can engage in business transactions without any physical presence, and governments have a legitimate right to tax such transactions.

Click here to view India’s response to S 301 of the U.S. on Equalisation Levy.

2. India to chair 3 subsidiary bodies of UNSC

News Summary

India will be chairing three-key subsidiary bodies of the United Nations Security Council (UNSC). The panels are Counter-Terrorism Committee (for 2022), Taliban Sanctions Committee, and Libya Sanctions committee.

Prelims GS – International Relations

  • UN Security Council has the responsibility of maintaining peace and security in the world.
  • It is one of the 6 principal organs of the UN.
  • UNSC has 15 members. i.e. 5 permanent members and 10 non-permanent members.
  • Each member has one vote.
  • 5 permanent members are:
    • China
    • France
    • Russia
    • the United Kingdom and
    • the United States.
  • These 5 permanent members have the power to veto any resolution in UNSC.
  • 10 non-permanent members are elected by the UN General Assembly for a two-year term.
  • 10 non-permanent members seats are distributed on a regional basis as given below:
    • 5 for African and Asian States
    • 1 for the Eastern European States
    • 2 for Latin American and the Caribbean States
    • 2 for Western European and other states.
  • India will need the vote of 2/3rd members of the UN General Assembly to become a non-permanent member for a two-year term.
  • India has won the non-permanent member seat of the United Nations Security Council by securing 184 votes out of 192 votes.
  • India has a term of two years starting from January 2021 in the UNSC.
  • India has already been a non-permanent member in UNSC for seven terms. So, this is not the first time. (Important point for Prelims)

Mini Insights

Mains GS2 – International Relations

India’s agenda in UNSC as a non-permanent member:
  • India can use its term as a non-permanent member to enhance its position as a responsible and constructive member of international society.
  • It should emphasize and strengthen multilateralism in UNSC meetings.
  • India should try to make progress on the elimination of weapons of mass destruction in a non-discriminatory manner.
  • India should highlight the UN Charter and promote the State’s sovereignty and should prevent the interference of outside countries in the domestic affairs of States.
  • Thus, India should use this opportunity to enhance the country’s reputation.

For more information on UNSC, click here to view the official website.



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