The interim period applicable will be from April 1, 2022 till implementation of Pillar One or March 31, 2024, whichever is earlier.

India and US will remain in close contact to ensure that there is a common understanding of the respective commitments and endeavour to resolve any further differences of views on this matter through constructive dialogue, the Ministry of Finance said in a media release.

On October 8, 2021, India and US had joined 134 other members of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain and the UK) in reaching agreement on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

On October 21, 2021, the US and Austria, France, Italy, Spain and the UK had 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 these six countries on that date (October 21 Joint Statement).

Under the agreement between the US and Austria, France, Italy, Spain and the UK, in defined circumstances, DST liability that US companies accrue during the interim period will be creditable against future income taxes accrued under Pillar 1 under the OECD agreement. In return, the US will terminate the currently suspended additional duties on goods of Austria, France, Italy, Spain and the UK that had been adopted in the DST Section 301 investigations.

Fibre2Fashion News Desk (KD)