Breaking News | India, US extend digital tax on e-commerce deliveries till June 30

New Delhi, June 28 (PTI) India and the United States have decided to extend the 2 per cent equalisation levy or digital tax on e-commerce deliveries till June 30, the finance ministry said.

In a significant reform of the international tax system, India and the United States joined 134 other members of the OECD/G20 inclusive framework (including Austria, France, Italy, Spain, and the United Kingdom) in reaching an agreement on October 8, 2021, on a statement on a two-pillar solution to address the tax challenges arising from the digitalization of the economy.

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On October 21, 2021, the United States and Austria, France, Italy, Spain, and the United Kingdom reached a political compromise on a transitional approach to unilateral measures applicable during the implementation of Pillar I.

On November 24, 2021, India and the United States agreed that the same terms and conditions that apply under the October 2021 Joint Statement with respect to India’s 2% e-commerce services levy and the U.S. trade action on the said levy will apply between India and the United States.

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The agreement was valid from 1 April 2022 until the implementation of Pillar I or until 31 March 2024, whichever comes first.

On December 18, 2023, the Inclusive Framework issued a statement calling for the text of the Pillar I multilateral convention to be finalized 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 United States and Austria, France, Italy, Spain and the United Kingdom decided to extend the political compromise set out in the October 21, 2024 Joint Statement until June 30, 2024.

“In the light of the above developments, India and the US have decided to extend the validity of the agreement reflected in the November 24 declarations to June 30, 2024. All other conditions of the transitional approach remain the same,” the finance ministry said in a statement.

India and the United States will remain in close contact to ensure common understanding of their respective obligations and will make every effort to resolve all issues in this regard through constructive dialogue, she added.

(This is an unedited and auto-generated story from a Syndicated News feed, the LatestLY team may not have modified or edited the content)