On October 21, 2021, the United States, Austria, France, Italy, Spain and the United Kingdom reached a political compromise on a transitional approach to the unilateral measures in place while Pillar 1 is implemented.
 "India, US extend 2% digital tax on e-commerce transactions until June 30: Indian finance ministry")
Press Trust of India New Delhi
India and the United States have decided to extend the 2 percent equalisation tax on e-commerce supplies, or digital tax, till June 30, the finance ministry announced on Friday.
In a major shake-up of the international tax system, India and the US joined 134 other countries of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain and the UK) to reach an agreement on a statement on October 8, 2021 on a two-pronged solution to address the tax challenges arising from the digitalisation of the economy.
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On October 21, 2021, the United States, Austria, France, Italy, Spain and the United Kingdom reached a political compromise on a transitional approach for the unilateral measures in place while Pillar 1 is in place.
On November 24, 2021, India and the United States agreed that with respect to India's levy of 2% equalization tax on the supply of e-commerce services and U.S. trade measures with respect to such equalization tax, the same terms and conditions as applied in the October 2021 Joint Statement will apply between India and the United States.
The validity period of this agreement runs from 1 April 2022 until the implementation of Pillar 1 or 31 March 2024, whichever comes first.
On 18 December 2023, the Inclusive Framework issued a statement calling for finalising the Pillar 1 multilateral treaty text by the end of March 2024, with the aim of holding a signing ceremony by the end of June 2024.
On February 15, 2024, the United States, Austria, France, Italy, Spain and the United Kingdom decided to extend the political compromise outlined in the October 21 joint statement until June 30, 2024.
“In light of the above developments, India and the United States have decided to extend the validity of the agreement reflected in the November 24 statement up to June 30, 2024. All other terms and conditions of the transitional arrangements remain unchanged,” the finance ministry said in a statement.
India and the US will remain in close contact to reach a common understanding of their respective commitments and seek to resolve all issues on this issue through constructive dialogue, it added.
