Indian Government Throws Another Bomb On Crypto Community

In India From 1st April 2022, 30% of tax levied on the part of crypto transactions, and 1 percent TDS as proposed in the 2022-23 budget on payments towards virtual currencies. In addition to this Indian Government imposed 28% of goods and service tax (GST) on all crypto transactions, this completes the crypto taxation process as a whole. 

According to CNBC TV18 report on Monday, India’s Goods and Services Tax (GST) Council is going to make a decision soon on whether to expand the scope of applicable transactions and impose a 28% of higher GST which may result in a crypto market fall, on all services and activities related to cryptocurrency. 

The GST council is formed to make decisions on GST-related issues, formed by the Country’s Finance minister. Sources report to the publication that:

” There are various aspects of cryptocurrencies- the transactions involving cryptos, cryptos are being used to make purchases, cryptos being received as payment. All these aspects are under examination and will be discussed by the law committee.”  

The Law Committee is responsible for analyzing tax proposals and recommending its view to the GST Council for further consideration. Currently in India crypto exchanges are classified as intermediary services levied with 18% GST. And every transaction will now be levied with 28% of GST if the GST council agrees upon this. 

The GST rate for online Gaming is 18%, whereas betting involved in online gaming is taxed at 28% GST. As there is a discussion on how to consider crypto transactions as gambling. Several MPs in the parliament have demanded to raise GST on crypto up to 28% same as gambling and lotteries. The law committee also examines the parliament’s decisions on virtual currency. 

Further, the Indian government is also working on the country’s crypto policy in consultation with the International Monetary Fund (IMF) and with the world bank on crypto regulations in India.