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Tuesday, July 16, 2024

India Likely To Impose 28% GST on Cryptocurrency

Currently 18% tax is levied on service provided by crypto exchanges.

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India’s Goods and Services Tax (GST) Council is likely to impose a 28% tax on all cryptocurrency transactions, according to media reports.

As per the reports, the GST Council has constituted a committee which will soon take up the proposal to impose 28% GST on all crypto related activities include sale and purchase of crypto tokens on various exchanges, holding these assets in wallets, and staking on various platforms. The GST Council may examine all these activities before arriving at a decision.

“The proposal is to levy 28 percent GST on services and all activities related to cryptocurrencies soon. The law committee’s view will be tabled before the fitment committee, it is then for the fitment committee to suggest a rate, which is likely to be 28 percent, and post this the proposal will be taken to the GST Council for a formal nod,” sources said.

New agency PTI had previously reported that the Government was viewing crypto at part with lottery casinos, betting, gambling and horse racing. All these activities are have 28% GST on the entire value plus 3% more in case of gold.

Reports on imposition of GST on cryptos have been doing the rounds ever since the Government announced flat 30% tax on cryptos and virtual digital assets. 1% TDS will also apply on crypto transfers from July 1, 2022. Currently 18% tax is levied on service provided by crypto exchanges.

Ankur Gupta, Practice Leader (Indirect Tax), SW India said, “Looking at the taxability of cryptos under direct tax introduced this year, it was just a matter of time that the taxability under GST also moves from 18 to 28 percent. However, 28% GST and 30% direct tax, would surely bleed out the majority of the profits which people have earned over a period of time when these cryptos are materialised.”


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