Government Mulling Special GST Slab for Cryptocurrencies, Working on Indirect Tax Regime For Crypto Assets: Report

As of now, crypto exchanges are considered intermediaries by the GST Council offering financial services.

Government Mulling Special GST Slab for Cryptocurrencies, Working on Indirect Tax Regime For Crypto Assets: Report

Photo Credit: Unsplash

The finance ministry intends to understand how crypto fits into the legal system

Highlights
  • Crypto assets have become the subject of heated debate
  • As of now, crypto exchanges continue to be levied 18 percent GST
  • The GST council had planned to raise the tax charged to 28 percent

The Goods and Services Tax (GST) council is reportedly waiting to decide whether crypto assets are declared as goods or services by the finance ministry before drawing up a comprehensive indirect tax regime for the asset class. As per a recent report quoting sources close to the government's proceedings, the finance ministry is currently working on breaking down the technological characteristics of cryptocurrencies before determining if a unique GST slab could be agreed upon for digital assets. The government reportedly intends to ensure that the exchequer does not lose revenue due to the ambiguous nature of crypto assets.

As per a report by Mint, citing two sources close to the matter, a new GST slab between 18 percent and 28 percent, could be allocated to crypto assets. The finance ministry is reportedly working on defining the characteristics of cryptocurrencies, and the digital assets place in the country's existing legal framework, before a new GST rate is decided.

"We are still discussing the applicability of GST on crypto assets…Right now, it is levied on services… So we have to see whether crypto assets are declared as good or services. We can have a special rate for this. It may not necessarily be 18 percent or 28 percent. Maybe somewhere in between. We have had a few discussions on it and will reach a decision soon," said one of the sources speaking to the publication.

The matter of crypto taxation by the country's GST Council has been a heated one thus far. Back in May 2022, several reports suggested that the council was planning to club crypto activities with speculative activities such as gambling, lottery, betting, and horse racing — which would raise the GST charged on cryptocurrencies to 28 percent. At the time, the council had also set up a committee to study and map different crypto activities such as trading, staking, and wallets for tax purposes.

As of now, crypto exchanges continue to be levied 18 percent GST and are considered intermediaries offering financial services.


With the next Apple event due very soon, we dive into all the leaks and rumours surrounding iPhone 14 on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Infinix Zero 55 QLED, Infinix X3 50 Smart TVs With 4K Resolution Launched in India: All Details
Flipkart Big Billion Days 2022 Sale: Best Offers Previewed So Far
Share on Facebook Tweet Snapchat Share Reddit Comment google-newsGoogle News
© Copyright Red Pixels Ventures Limited 2023. All rights reserved.