Washington [US], November 24 (ANI): United States Trade Representative (USTR) on Wednesday welcomed announcements that America has reached a political agreement with India regarding the treatment of Digital Services Taxes (DSTs) during the interim period prior to full implementation of Pillar 1 of the Organization for Economic Co-operation and Development (OECD) agreement.
The announcement was made by the Ministry of Finance of the Government of India and by the US Department of the Treasury, according to the statement issued by United States Trade Representative.
Under OECD agreement, and consistent with and applying the same terms as the earlier agreements with Austria, France, Italy, Spain, the United Kingdom, and Turkey, in defined circumstances the liability from India's equalisation levy on e-commerce supply of services that US companies accrue in India during the interim period will be creditable against future taxes accrued under Pillar 1 of the OECD agreement.
The period during which the credit accrues will, however, be from April 1, 2022 until either the implementation of Pillar 1 or March 31, 2024 (whichever is earlier), the statement read.
It further stated that in return, the United States will terminate the currently-suspended additional duties on goods of India that had been adopted in the DST Section 301 investigation.
USTR is proceeding with the formal steps required to terminate this Section 301 trade action, and in coordination with Treasury, will monitor implementation of the agreement going forward.
The United States has now reached an agreement regarding the treatment of DSTs during the transitional period prior to entry into the force of Pillar One of the OECD's historic agreements on global taxation in all seven of the DST Section 301 investigations, it added. (ANI)