Agreement on transitional approach between India and US for digital tax on e-commerce supplies

Published on November 25, 2021

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India and the United States have agreed for a transitional approach on equalisation levy or digital tax on e-commerce supplies beginning from April 1, 2022, till pillar one takes effect or March 31st, 2024, whichever is earlier (called “interim period”). In a major reform of the international tax system, on October 8 this year, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate (under pillar 2).However, this would require countries to remove all digital services tax including India’s Equalisation levy and other similar unilateral measures adopted by other countries. 

Please read the attached article for the complete information.

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