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1 Office of the U.S. Trade Representative + + + + + Hearing Regarding the Proposed Action in the Section 301 Investigation of Di 1 OFFICE OF THE U.S. TRADE REPRESENTATIVE + + + + + HEARING REGARDING THE PROPOSED ACTION IN THE SECTION 301 INVESTIGATION OF DIGITAL SERVICES TAXES ADOPTED BY INDIA + + + + + MONDAY MAY 10, 2021 + + + + + The hearing convened via videoconference, Thomas Au and Benjamin Allen, Chairs, presiding. PRESENT THOMAS AU, USTR BENJAMIN ALLEN, USTR NABIL ABBYAD, Department of Commerce ALEXANDER AMDUR, Customs and Border Protection SARAH BONNER, U.S. Small Business Administration WON CHANG, Department of the Treasury PATRICK CHILDRESS, USTR SUSAN KARIMIHA, USDA EMMA LAURY, Department of Labor BRENDAN LYNCH, USTR REBECCA NOLAN, Department of State MATTHEW SHAILER, USDA SARAH SHORT, USTR ALBERT YAM, Department of the Treasury Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 2 ALSO PRESENT BRIAN SCARPELLI, ACT | The App Association MANAB MAJUMDAR, Federation of Indian Chambers of Commerce and Industry KAPIL SHARMA, Confederation of Indian Industry NIGAM NUGGEHALLI, School of Law, BML Munjal University KINSHUK JHA, Jindal Global Law School ROSMY JOAN, National Law University R.V. ANURADHA, Clarus Law Associates VALUN CHABLANI, Gujarat National Law University RAJIV JAIN, Sitapura Gems & Jewelry Industry Association SUVANKAR SEN, Senco Gold Limited ARVIND GUPTA, Gallant Jewelry COLIN SHAH, Gem and Jewelry Export Promotion Council (GJEPC) RAJEEV PANDYA, SEEPZ Gems & Jewelry Manufacturers Association (SGJMA) NEVILLE TATA, Renaissance Global Limited SIVAKUMAR KUNAPULI, Seafood Exporters Association of India JOHN WILLIAMS, Southern Shrimp Alliance DAVID VEAL, American Shrimp Processors Association Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 3 CONTENTS Panel 1 Brian Scarpelli, ACT | The App Association . 9 Manab Majumdar, Federation of Indian Chambers of Commerce and Industry . .14 Kapil Sharma, Confederation of Indian Industry. .19 Panel 2 Nigam Nuggehalli, School of Law, BML Munjal University. .41 Kinshuk Jha, Jindal Global Law School, O.P. Jindal Global University. .46 Rosmy Joan, National Law University. .51 R.V. Anuradha, Clarus Law Associates . .55 Valun Chablani, Gujarat National Law University . .61 Panel 3 Rajiv Jain, Sitapura Gems & Jewelry Industry Association. `79 Suvankar Sen, Senco Gold Limited . .82 Arvind Gupta, Gallant Jewelry. .84 Colin Shah, Gem and Jewelry Export Promotion Council (GJEPC). .87 Rajeev Pandya, SEEPZ Gems & Jewelry Manufacturers Association, (SGJMA) . .93 Neville Tata, Renaissance Global Limited . .98 Panel 4 Sivakumar Kunapuli, Seafood Exporters Association of India . 119 John Williams, Southern Shrimp Alliance. 124 David Veal, American Shrimp Processors Association . 129 Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 4 1 P-R-O-C-E-E-D-I-N-G-S 2 9:31 a.m. 3 MR. AU: Good morning and welcome. 4 The Office of the United States Trade 5 Representative, in conjunction with the 6 Interagency Section 301 Committee, is holding 7 this public hearing regarding a potential trade 8 action in connection with its Section 301 9 investigation of India's digital services tax, or 10 DST. 11 The United States Trade Representative 12 initiated this investigation on June 2, 2020. In 13 a notice published on March 31, USTR announced a 14 proposed trade action in this investigation. 15 That notice can be found at 86 FR 16824. 16 In this public hearing, USTR and the 17 Section 301 Committee will hear witness testimony 18 regarding the proposed trade action. 19 The deadline for rebuttal comments, 20 which may include written answers to questions 21 posed at today's hearing, is one week from today. 22 The Section 301 Committee will carefully consider Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 5 1 the testimony provided at this hearing as well as 2 testimony provided at the multi-jurisdictional 3 hearing held on Monday, May 3. 4 The Committee will also review the 5 written comments received in response to the 6 March 31 notice of the proposed trade action as 7 well as any post-hearing rebuttal comments from 8 interested parties. 9 The Section 301 Committee will then 10 make a recommendation to the U.S. Trade 11 Representative regarding what, if any, trade 12 action to take. 13 Before we begin today's testimony, I 14 will provide some procedural and administrative 15 instructions and introduce the U.S. Government 16 representatives that will participate in the 17 hearing. 18 First, some procedural and 19 administrative instructions. Today's hearing is 20 organized into four panels of witnesses, across 21 which 17 individuals are scheduled to testify. 22 The provisional list of witnesses has been posted Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 6 1 to USTR's website. 2 Each witness appearing at the hearing 3 is limited to five minutes of direct testimony. 4 After the testimony from each panel of witnesses, 5 the Section 301 Committee will have an 6 opportunity to ask questions. 7 Given the large number of witnesses 8 that will be testifying today, we ask that you 9 please answer our questions directly and 10 succinctly. Please recall that you have the 11 opportunity to provide more extensive responses 12 in a post-hearing submission. 13 Between panels, there will be a short 14 break while we assemble the next panel. 15 Post-hearing comments, including any written 16 responses to questions from the Section 301 17 Committee, are due by May 17th. The rules and 18 procedures for written submissions are set out in 19 the March 31st Federal Register notice. 20 A written transcript of this hearing 21 will be posted on the USTR website as soon as 22 possible at the conclusion of this hearing. Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 7 1 Now, for a few technical points. For 2 those participating in the hearing, when it is 3 not your turn to speak, please be sure to leave 4 your video and microphone muted. If you would 5 like to respond to a question posed to another 6 witness on your panel, you may unmute your video. 7 That will signal to us that you would like to be 8 recognized to speak. 9 If you are having technical difficulty 10 and need help, please let us know in the chat box 11 on the BlueJeans platform. 12 When you are speaking, you are 13 responsible for keeping time. 14 I would now like to introduce the U.S. 15 government panel that will be presiding over this 16 hearing. 17 I am Thomas Au from the USTR Office of 18 General Counsel. I will serve as the Chair for 19 Panels 1 and 2 of this hearing. I am joined in 20 the room by my USTR colleagues Benjamin Allen and 21 Patrick Childress, who are also from the USTR 22 Office of General Counsel. Benjamin Allen will Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 8 1 serve as Chair for Panels 3 and 4 of this 2 hearing. 3 Also joining us for some of our panels 4 today are Brendan Lynch from USTR's Office of 5 Central and South Asian Affairs and Sarah Short 6 from USTR's Office of Small Business, Market 7 Access and Industrial Competitiveness. 8 We are so pleased to be joined today 9 by several international trade and economic 10 experts from a range of U.S. government agencies. 11 From the State Department, we have 12 Rebecca Nolan. From the Department of Commerce, 13 we have Nabil Abbyad. From Customs and Border 14 Protection, we have Alexander Amdur. From 15 Treasury, we have Won Chang and Albert Yam. And 16 from the Department of Agriculture, we have 17 Matthew Shailer and Susan Karimiha. From the 18 Department of Labor, we have Emma Laury. And 19 from the Small Business Administration, we have 20 Sarah Bonner. 21 With that, we will now proceed with 22 testimony from our first panel. That panel is Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 9 1 comprised of Brian Scarpelli from ACT, The App 2 Association, Manab Majumdar from the Federation 3 of Indian Chambers of Commerce and Industry and 4 third, we have a change from the initial witness 5 list, representing the Confederation of Indian 6 Industry will be Kapil Sharma. 7 We will begin with Brian Scarpelli. 8 You may proceed with your testimony when ready. 9 MR. SCARPELLI: Great. Thank you so 10 much. Thank you for the opportunity to share 11 views on India's digital service tax, and its 12 impact on the American small business digital 13 economy community that ACT, The App Association 14 represents. 15 ACT, The App Association, represents 16 thousands of small business software application 17 development companies and technology firms that 18 create the software used on mobile devices and in 19 enterprise systems around the globe. 20 Today the ecosystem The App 21 Association represents, which we call the app 22 economy, is valued at approximately $1.7 trillion Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 10 1 annual and is responsible for over 5.9 million 2 American jobs. 3 Alongside the world's rapid embrace of 4 mobile technology, our members have been creating 5 innovative solutions that power the Internet of 6 Things across modalities in segments of the 7 economy. 8 India is a very important market for 9 App Association members. As one example of that, 10 since 2014 annual net revenue for apps across 11 some major platforms has increased over 1,400 12 percent from 20 million to 316 million by 2020, 13 2014 through 2020.
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