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Federal Register / Vol. 86, No. 229 / Thursday, December 2, 2021 / Notices
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parties agreed to remove existing Digital Services Taxes DSTs and other relevant similar measures, and to coordinate the withdrawal of these taxes. On November 24, 2021, India and the United States issued statements describing a transitional approach to Indias DST prior to entry into force of Pillar 1. These statements reflect a political agreement that, in defined circumstances, the DST liability that U.S. companies accrue in India during the interim period will be creditable against future taxes accrued under Pillar 1 of the OECD agreement. Based on the commitment of India to remove its DST
pursuant to Pillar 1 and on Indias political agreement to this transitional approach prior to Pillar 1s entry into force, the U.S. Trade Representative has determined to terminate the section 301
action taken in the investigation of Indias DST. In coordination with the U.S. Department of the Treasury Treasury, USTR will monitor implementation of the removal of Indias DST as provided for under Pillar 1 and the transitional approach agreed to by India.
DATES: The additional duties on products of India are terminated as of November 28, 2021.
FOR FURTHER INFORMATION CONTACT: For questions concerning this notice, please contact Benjamin Allen, Thomas Au, Patrick Childress, or Kate Hadley, Assistant General Counsels at 202
3959439, 202 3950380, 202 395
9531, and 202 3953911, respectively, Robert Tanner, Director, Services and Investment at 202 3956125, or Brendan Lynch, Deputy Assistant U.S.
Trade Representative for South and Central Asian Affairs at 202 3952851.
SUPPLEMENTARY INFORMATION:
I. Proceedings in the Investigation This investigation is addressed to Indias 2020 equalisation levy, which is referred to throughout the investigation as Indias DST. See, e.g., 86 FR 30356 June 7, 2021 and the India DST report, published at https
ustr.gov/sites/default/files/enforcement/
301Investigations/Report%20on %20India%E2%80%99s%20Digital %20Services%20Tax.pdf. For further background on the proceedings in the section 301 investigation of Indias DST, please see prior notices including: 85 FR
34709 June 5, 2020; 86 FR 2478
January 12, 2021; 86 FR 16824 March 31, 2021; and 86 FR 30356 June 7, 2021.
On June 2, 2021, the U.S. Trade Representative determined to take action in the form of additional duties on certain products of India and to
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immediately suspend those additional duties for up to 180 days. 86 FR 30356
June 7, 2021.
II. OECD/G20 Negotiations One-hundred forty-one jurisdictions are engaged in international tax negotiations under the OECD/G20
Inclusive Framework on Base Erosion and Profit Shifting. On October 8, 2021, India joined the United States and 134
other participants in reaching political agreement on a Statement on a TwoPillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. OECD/
G20 Base Erosion and Profit Shifting Project, Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy Oct. 8, 2021 at https
www.oecd.org/tax/beps/statement-on-atwo-pillar-solution-to-address-the-taxchallenges-arising-from-thedigitalisation-of-the-economy-october2021.pdf the OECD/G20 Two-Pillar Solution. The statement provides that Pillar 1 will be implemented through a multilateral convention. With respect to DSTs, the statement provides:
The Multilateral Convention MLC will require all parties to remove all Digital Services Taxes and other relevant similar measures with respect to all companies, and to commit not to introduce such measures in the future. No newly enacted Digital Services Taxes or other relevant similar measures will be imposed on any company from 8 October 2021 and until the earlier of 31 December 2023 or the coming into force of the MLC.
The modality for the removal of existing Digital Services Taxes and other relevant similar measures will be appropriately coordinated.

III. Indias Agreement On November 24, 2021, The Ministry of Finance of the Government of India and Treasury issued statements reflecting a political agreement on a transitional approach to Indias DST
while implementing Pillar 1. India and USA agree on a transitional approach on Equalisation Levy 2020, Ministry of Fin. of the Govt of India Nov. 24, 2021, https pib.gov.in/
PressReleasePage.aspx?PRID=1774692;
Treasury Announces Agreement on the Transition from Existing Indian Equalization Levy to New Multilateral Solution Agreed by the OECDG20
Inclusive Framework, U.S. Dept of the Treas. Nov. 24, 2021, https
home.treasury.gov/news/press-releases/
jy0504. Under this agreement and in defined circumstances, the liability from Indias DST that U.S. companies accrue in India during the interim period will be creditable against future taxes accrued under Pillar 1 of the OECD

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agreement. The period during which the credit accrues will be from April 1, 2022, until either the implementation of Pillar 1 or March 31, 2024, whichever is earlier. In return, the United States commits to terminate the existing section 301 trade action on goods of India, and not to impose further trade actions against India with respect to its existing DST until the earlier of the date the Pillar 1 multilateral convention comes into force or March 31, 2024. Id.
IV. Termination of Action Section 307 of the Trade Act of 1974, as amended Trade Act 19 U.S.C.
2417, provides that the Trade Representative may modify or terminate any action, subject to the specific direction, if any, of the President with respect to such action, that is being taken under section 301 of this title if . . . such action is being taken under section 301b of this title and is no longer appropriate. The U.S. Trade Representative has found that the political agreement of India to the OECD/G20 Two-Pillar Solution, which provides for the removal of DSTs upon entry into force of Pillar 1, and the transitional approach agreed to by India provide a satisfactory resolution of the matters covered by the section 301
investigation of Indias DST.
Accordingly, pursuant to section 307 of the Trade Act, the U.S. Trade Representative has determined that the suspended trade action in this investigation is no longer appropriate and that the action should be terminated.
The U.S. Trade Representatives determination was made in consultation with Treasury and considers the advice of the interagency Section 301
Committee, consultations with representatives of the domestic industry concerned, and public comments and advisory committee advice received during the investigations.
In order to implement the termination of the section 301 action in the investigation of Indias DST, subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States HTSUS is modified by the Annex to this notice.
V. Ongoing Monitoring Section 306a of the Trade Act 19
U.S.C. 2416a provides that the Trade Representative shall monitor the implementation of each measure undertaken, or agreement that is entered into, by a foreign country to provide a satisfactory resolution of a matter subject to investigation. . . . Section 306b 19 U.S.C. 2416b provides that if, on the basis of the monitoring
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