India’s finance ministry is reportedly working on how a goods and services tax (GST) could be applied to cryptocurrency transactions. “A better understanding of how cryptocurrencies fit into our legal system is a prerequisite for making decisions on GST rates,” a source told local media.
India’s Goods and Services Tax Could Soon Apply to Cryptocurrency Transactions
India’s finance ministry is said to be working on a comprehensive goods and services tax (GST) regime, Livemint reported on Monday. One source said:
We are still discussing the possibility of applying GST in the case of crypto assets. Right now it’s hit on services, so we need to see if crypto assets can be claimed as goods or services.
However, the source is quoted as saying: “We may have a special slot for it. It might not necessarily be 18% or 28% – it could be somewhere in between. We have had a few discussions about it and will come to a decision soon.”
Another source explained to the news outlet:
A better understanding of how cryptocurrencies fit into our legal system is a prerequisite for making decisions on GST rates.
GST will only be applied to escrow or service fees, and not to the full value of the property, the publication said, adding that the government is also examining the handling of such claims. certain transactions, like mining or airdropped crypto tokens.
An Indian ministerial panel is said to have met at the end of June to discuss GST on crypto transactions. However, officials did not disclose any decisions made from the meeting.
The Indian government has begun to tax income and cryptocurrency transactions. A 30% tax on income from crypto-assets takes effect on April 1. In addition, a 1% tax withheld at source (TDS) on crypto-asset settlement begins to apply on April 1. July 1st.
Meanwhile, the Indian government is also working on the country’s cryptocurrency policy. In an effort to become a compliant Financial Action Task Force (FATF), the government has a plan complete its stance on the legitimacy of cryptocurrencies early next year. Indian Finance Minister Nirmala Sitharaman also urged the International Monetary Fund (IMF) to take the main role in developing a global framework for cryptocurrencies.
Do you think India will impose GST on cryptocurrencies? Let us know in the comments section below.
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