India’s Goods and Service Tax Council is considering levying a 28% GST on Bitcoin and other cryptocurrencies in its next session.
According to sources, cryptocurrencies are still outside the ambit of GST. Therefore, the GST Council considers bitcoin and other crypto in a separate category separately as they act as intermediaries for foreign exchanges.
Generally, an 18% tax is levied on foreign products and services provided to people in India. However, the Law Committee of the GST Council has formed a clear proposal on levying 28% GST on every transaction as a service.
GST Council Proposes a 28% GST on Cryptocurrencies
After the Indian government announced a 30% tax on gains made from cryptocurrencies, the GST Council decided to get more clarity on the GST aspect as well for cryptocurrencies. Now, the majority of people in the Law Committee have decided on a 28% GST to be levied on every transaction provided as a service to people, sources told CNBC-TV18 on May 9.
The GST Council’s law committee is going to meet soon to discuss details on what other services related to cryptocurrencies will be included in the category.
“There are various aspects of cryptocurrencies – the transactions involving cryptos, cryptos being used to make purchases, cryptos being received as payments. All these aspects are under examination and will be discussed by the law committee.”
Online betting, gambling, race clubs, and other risky activities attracts a 28% GST.
Thus, the crypto community in India is again being put under pressure as the Indian government continued to maintain its negative stance on bitcoin and other cryptocurrencies. The community is already furious due to the 30% income tax and an additional 1% TDS. Now, if the 28% GST proposal is passed, it could be the end of the crypto industry in India.
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The crypto market is already under pressure due to rising interest rates by the Fed and other central banks, as well as, futures positions getting liquidated. With the GST Council increasing the tax on cryptocurrencies to 28%, the crypto volumes will further dive in India.
According to Ajeet Khurana, founder of Reflexical Pte Ltd, if the GST Council is planning to impose a 28% tax on crypto services provided to people in India that would be a bad signal for the Indian crypto community. However, if the GST is levied on the complete transaction that would mean the end of the crypto industry in India.
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