Categories: Bitcoin In India
May 30, 2018
| On 1 year ago

Is India mulling for GST regime on Virtual Currencies?

By Shalini Singh @Shalini_Singh15

Reports suggest that the government of India is planning to levy an 18 percent Goods and Services Tax (GST) on trading of digital coins.

Although there is no clarity about its legal status in the country, the Central Board of Indirect Taxes and Customs would be proposing the idea before GST Council after it gets finalized.

Neither illegal nor legal in India, Bitcoin affords anonymity in the grey area.

Proposal Suggests:

  • Purchase or sale of virtual currencies should be considered as the supply of goods and the digital currencies which facilitate transactions like supply, transfer, accounting, storage among others would be treated as services.
  • For buyers and sellers in India, the transaction would be treated as the supply of software and the location of buyer would be the place of supply.
  • The transactions done out of India would be liable for integrated GST and it would be considered an import or export of goods.
  • IGST will be levied on cross-border supplies.

The possibility of retrospective taxation:

The government might consider levying GST on the crypto-trading from July 2018, the same day the new indirect tax regime was implemented.

Studies suggest people deal with virtual currencies worth Rs. 200 crore, and if it gets taxed, it would fetch the government about Rs. 360 crore in GST.

Legality of Taxation:

The government and the RBI have already warned the people about the threats of Bitcoin trading since there is no underlying asset and that they were used in financial illegal activities.

Taxation of services and exchanges have again thrown a question on the legality of the digital currencies in India and has further complicated the equations of the digital currencies in our country.

Shalini Singh @Shalini_Singh15

A Writer | A Reader | Above all- A Human Being constantly looking forward to pushing the envelopes!

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