India and the United States decided to extend their agreement relating to the 2 per cent equalisation levy imposed by New Delhi on e-commerce platforms until June 30, the Finance Ministry said on Friday.
In October 2021, India and the US came to terms to settle differences with respect to the equalisation levy, commonly known as the digital tax.
Under the agreement, India will continue to impose the levy until March 31, 2024, or until the implementation of Pillar 1 of the OECD agreement on taxing multinationals and cross-border digital transactions. In return, the US will terminate the trade tariff actions which it had announced in response to the levy and will not take any further actions.
On December 18, 2023, the Inclusive Framework issued a statement calling for the 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.
“All other terms of the transitional approach remain the same,” the Ministry said. It added that India and the United States will remain in close contact to ensure that there is a common understanding of the respective commitments and will endeavour to resolve all issues on this matter through constructive dialogue.
First Published: Jun 28 2024 | 8:22 PM IST
