India, US extend digital tax on e-commerce supplies till June 30
India and the US have decided to extend a 2 per cent equalisation levy or digital tax on e-commerce supplies until June 30, the finance ministry said on Friday. In a major reform of the international tax system, India and the US have joined 134 other members of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain, and the UK) in reaching an agreement on October 8, 2021, on the statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy.
On October 21, 2021, the US and Austria, France, Italy, Spain, and the UK reached a political compromise on the transitional approach to the unilateral measures in force while Pillar 1 is implemented.
On November 24, 2021, India and the US agreed that the same terms that apply under the October 2021 Joint Statement shall apply between India and the US with respect to India's charge of 2 per cent equalisation levy on e-commerce supply of services and the US' trade action regarding the said Equalisation Levy.
The validity of this agreement was from April 1, 2022, till implementation of Pillar 1 or March 31, 2024, whichever is earlier.
On December 18, 2023, the Inclusive Framework issued a statement calling for a finalisation of the text of the Pillar 1 multilateral convention by the end of March 2024 with a view to holding a signing ceremony by the end of June 2024.
On February 15, 2024, the US and Austria, France, Italy, Spain, and the UK decided to extend the political compromise set forth in the October 21
