India’s finance ministry is reportedly working on how the goods and services tax (GST) could be applied to crypto transactions.” A better understanding of how cryptocurrencies fit into our legal system is a prerequisite for a decision on the GST rate,” an official told local media.
India’s Goods and Services Tax could soon be applied to crypto transactions
India’s finance ministry is reportedly working on a comprehensive goods and services tax (GST) regime, Livemint reported Monday. A source told the publication.
We are still discussing the applicability of GST in the case of crypto assets. Right now it is taxed on services, so we need to see if crypto assets are declared as goods or services.
Previously, local media reported that the government was considering charging 18% or 28% GST on crypto assets.
However, the source was quoted as saying:” We can have a special rate for it . It may not necessarily be 18% or 28% – maybe somewhere in between. We have had several discussions about it and will come to a decision soon.”
Another official explained to the news outlet:
A better understanding of how cryptocurrencies fit into our legal system is a prerequisite for a decision on the GST rate.
GST applies only to margins or service charges and not to the entire value of the asset, the publication said, adding that the government is also considering the treatment of certain transactions such as mining or airdropped crypto tokens.
An Indian ministerial committee reportedly met in late June to discuss the GST tax on crypto transactions. However, officials did not reveal any decisions that came out of the meeting.
The Indian government has already begun taxing crypto income and transactions. A 30% tax on income from crypto assets went into effect on April 1. Additionally, a 1% withholding tax (TDS) on payments for crypto assets began applying on July 1
Meanwhile, the Indian government is also working on the country’s crypto policy. To comply with the Financial Action Task Force (FATF), the government plans to finalize its stance on the legality of cryptocurrencies by early next year. Indian Finance Minister Nirmala Sitharaman has also called on the International Monetary Fund (IMF) to take a leading role in establishing a global framework for cryptocurrencies.
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