New Delhi, Nov 25, : .India and the USA have agreed to a ‘transitional strategy’ for 2020’s Equalization Levy. According to Ministry of Finance India and the USA will maintain close contact in order to reach a common understanding of their respective commitments.They will also endeavor to resolve any differences of view through constructive dialogue.
The agreement’s final terms must be in place by February 1, 2022.
Notably, India and the US joined 134 members of the OECD/G20 Inclusive Framework on October 8, 2021 to reach agreement on the ‘Statement of a Two-Pillar Solution for Addressing the Tax Challenges Arising From the Digitalization of the Economy’.
Additionally, the UK, Austria, France and Italy reached an agreement on October 21st 2021 on a transitional approach for existing ‘Unilateral measures’ while implementing Pillar 1.
“The agreement is reflected by the joint statement that was released on October 21st, ‘).”by these six countries (‘October 21 Joint Declaration
India and the US have therefore agreed to apply the same terms as the ‘October 21 Joint Statement’ between the US and India regarding India’s 2 per cent equalisation levie on e-commerce supply services and the US trade action regarding the said “Equalization Levy”.
“However, the interim period will be applicable will be between 1st April 2022 and implementation of ‘Pillar 1’ or 31 March 2024, whichever comes first,” the ministry stated in a statement.
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