Taxing Electronic Commerce

C Satapathy THE US and the European Union have reached an agreement on December 5, 1997 "to work towards a global understanding that (i) when-goods are ordered electronically but delivered physically, there will be no additional import duties in relation to the use of electronic means; and (ii) in all other cases relating electronic commerce, the absence of duties on imports should remain". Subsequently, on February 19, 1998, the US has presented a market access proposal to the WTO General Council calling for agreement among WTO members to maintain "current practices not to impose duties on electronic transmissions". The US proposal obviously presupposes that no government considers electronic transmissions to be importations for customs duty purposes and suggests that such dutyfree status should be maintained in the future also. Moreover, the US proposal treats all electronic transmissions alike irrespective of their content. It is clear that both the initiatives are meant for securing a completely duty. free environment for all electronic transmissions.