The CBIC is looking at taxing other options, including cryptocurrency mining platforms as well as the use of digital currencies (VDAs) for a method for exchange when purchasing goods The report
The CBIC is currently working on a paper on policy that will be presented before the committee on law of the GST Council once ready
The GST Council may take up the matter later in the year, probably after its meeting in September.
The Central Board of Indirect Taxes and Customs (CBIC) is reported to be conducting an extensive study on bringing more cryptocurrency transactions into the net of taxation.
The tax on goods and services (GST) policy section of CBIC is considering taxing additional options, including cryptocurrency mining platforms as well as the use for virtual digital assets (VDAs) to serve as means for exchange when buying goods Sources told The Financial Express.
The CBIC is currently working on a paper on policy and will submit it for review by the Law Committee in the GST Council once it is complete.
People who are familiar with the issue informed us they believe that GST Council may take up the matter later in the year probably after its meeting in September.
“We are still examining some of the issues such as what is the nature of the transactions/ business, how they happen, which are the entities involved, is it always consumer-to-consumer or business-to-consumer, is there a system of registration, could there be onshore and offshore transactions. Additionally, there must be an understanding as to as to whether certain transactions are actually either services or goods,” a senior official was quoted as declaring.
This move will further increase the tax burden on the crypto market. The process started in February of this year the day that the Finance Minister Nirmala Sitharaman, in her Budget speech, declared that all earnings from the transfer of VDAs will be taxed at 30%..
In the wake of this, the government implemented a tax of 1% taken at the source (TDS) on every VDA transactions. In case this wasn’t sufficient, the government stated in the past that there was speculation that the Centre was considering levying the GST rate of 28% on cryptocurrency, which would be on the same rate as betting and lottery.
It follows Sitharaman’s announcement earlier in the year, in which she said that the finance department was aware of the possibility of tax revenue through digital assets. “Many Indians have seen a future for crypto, so I believe there is a chance of earning revenue from it” the minister had stated in the past.
Although it is true that the Indian government was judged by its reaction to cryptocurrencies and the RBI’s top brass the Reserve Bank of India (RBI) has not been shy about expressing scathing criticism of cryptocurrency. Although RBI governor Shaktikanta Das has branded cryptocurrencies”a obvious threat for the nation and the Vice Governor T Rabi Sankar termed cryptos as a “real danger to
In the most concise declaration on the subject Sitharaman was last month informing that the Parliament of the RBI is seeking an end to cryptocurrency because of their ‘destabilising impact on the fiscal and monetary security of India.
The industry is still plagued by incidents which have brought attention on cryptocurrency exchanges. The cryptocurrency exchange Vauldsuspended its operations. Additionally, CoinSwitch Kuber and CoinDCX have also stopped crypto and withdrawals using fiat in the past one or two years.
A mere week ago in the last week, WazirX was raided by the Enforcement Directorate (ED) raided the WazirX premises WazirX and blocked assets of approximately INR 64.67 Cr. Since since then, Binance, which announced the acquisition of WazirX in the year 2019, as well as Zanmai Labs, which apparently cooperates with WazirX and Zanmai Labs, have been blamed for the incident on one another and defying the oversight of Indian regulators.