According to Bloomberg, by anonymous sources, the Indian government may levy 18% of Goods and Service Tax (GST) on crypto currency trades, the proposal is being considered by Central Board of Indirect Taxes and Customs.
The proposal states that Virtual currencies could be considered as intangible goods, which is equivalent to the supply of software services. Crypto currency transactions within the Indian territory will be liable for GST and transactions beyond Indian territory would be considered as import or export of goods and transactions will be levied as integrated GST (IGST).
Retrospective Taxation – According to Bloomberg, Indian government may impose GST on crypto trading retrospectively from July 1, 2017. The huge increase in the number of traders in past 10 months is expected to fetch some hundred million rupees in GST to government.
Exchanges & Tax on Mining – All crypto currency exchanges have to pay GST on the commission they earn. The act of mining involves rewards and transaction fees. Miner has to pay Tax on transaction fees or reward. Every miner must register under GST, if the value of reward exceeds Rs 20 lakh.
There is still an ambiguity in India whether crypto currencies are officially banned or legalised. Last month decision by RBI on banning of crypto related trades shows Indian government disinterest towards virtual currencies. The new proposal consideration by Central Board of Indirect Taxes and Customs seems to be a beginning of regulations towards dealing of virtual currencies in the nation.
Comment your opinion on what do you think of Indian Government levying Tax on Crypto currency trading.
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