Commerce Supply of Services
Ministry of Finance has informed that India and United States have agreed that the agreed terms shall apply between the United States and India with respect to India’s charge of 2% equalisation levy on e-commerce supply of services and the United States’ trade action regarding the said Equalisation Levy.
However, the interim period that will be applicable will be from 1st April 2022 till implementation of Pillar 1 or 31st March 2024, whichever is earlier.
In this regard, on 8th October, 2021, India and United States joined 134 other members of the OECD/G20 Inclusive Framework in reaching agreement on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.
Further, on 21st October, 2021, they consented upon an agreement on a transitional approach to existing Unilateral Measures while implementing Pillar 1.
The final terms of the Agreement shall be finalised by 1st February 2022.