India and USA agree on transitional approach on equalization levy on e-commerce operators: FinMin

Press Release, dated 24-11-2021

On October 21, 2021, the United States AND Austria, France, Italy, Spain, and the United Kingdom reached an agreement on a transitional approach to existing Unilateral Measures while implementing Pillar 1. The agreement is reflected in the joint statement that was issued by those six countries on that date (October 21 Joint Statement).
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% equalization levy on e-commerce supply of services and the United States’ trade action regarding the said Equalisation Levy. The interim period will be applicable from 1st April 2022 till the implementation of Pillar One or 31st March 2024, whichever is earlier.

Accordingly, India will drop the levy of equalization levy by implementing Pillar One or 31-03-2024, whichever is earlier. Similarly, the USA will terminate its trade tariff actions announced in response to the equalization levy and will not take any further action against India.

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