Govt Likely to Delay Pillar-2 Tax Rules Citing Limited Revenue Benefit

India is likely to delay the implementation of the OECD-led Pillar 2 tax regime, which mandates a 15% minimum corporate tax rate for multinational enterprises with global revenues exceeding €750 million. The government may include an enabling provision in the Income Tax Act as part of a broader legislative revamp, but full implementation could be postponed due to minimal projected revenue gains. Internal analysis suggests that adopting Pillar 2 would yield only ₹100-200 crore in additional revenue, a modest amount compared to the potential loss of sovereign taxation powers. Concerns over losing control of tax policy and the complexity of revenue collection under the regime are key factors in this decision. While Pillar 2 aligns India’s corporate tax structure with global standards and helps curb profit shifting, the government prefers to maintain legislative autonomy. The actual adoption of implementation rules may be deferred as the government evaluates the balance between fiscal autonomy and international tax commitments.