India, US Agree On Transitional Approach On Equalisation Levy 2020

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New Delhi: The Finance Ministry on Wednesday said that India and the US have agreed to a transitional approach on equalisation levy or digital tax on e-commerce supplies beginning April 1.

India and United States have agreed that the same terms that apply under the October 21 Joint Statement 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 One or 31st March 2024, whichever is earlier.

India and United States will remain in close contact to ensure that there is a common understanding of the respective commitments and endeavor to resolve any further differences of views on this matter through constructive dialogue.

The final terms of the Agreement shall be finalised by 1st February 2022.

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