India ponders over GST on cryptocurrencies trading

Wednesday 23 May 2018 11:53 CET | News

Despite a lack of clarity about cryptocurrencies’ legal status in India, Indian officials consider levy Goods and Services Tax on cryptocurrency trading.

Therefore, the Indian government may levy an 18% GST, Bloomberg cited people with direct knowledge of the matter. The proposal, being considered by Central Board of Indirect Taxes and Customs, will be tabled before the GST Council after it’s finalised, they said.

According to the proposal the purchase or sale of cryptocurrencies should be considered as supply of goods, and those facilitating transactions like supply, transfer, storage, accounting, among others, will be treated as services. If buyers and sellers are in India, the transaction would be treated as a supply of software and the buyer’s location will be the place of supply.

Transactions beyond the Indian territory will be liable for integrated GST, and would be considered as import or export of goods. IGST will be levied on cross-border supplies.

Cryptocurrency exchanges will have to register under GST and pay tax on the commission they earn, according to the proposal. For exchanges located outside India, service provided by them to Indians would be considered import of a service, and they will have to pay IGST.

Mining will be treated as a supply of service since it generates cryptocurrency and involves rewards and transaction fees, according to people aware of the matter. Tax should be collected from the miner on transaction fees or reward, and if value of the reward exceeds Rs 20 lakh, individual miners will have to register under GST, they said for Bloomberg.

India hasn’t officially banned or legalised virtual currencies, but the government has, on multiple occasions, pointed to the risks involved.

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Keywords: Goods and Services Tax, cryptocurrency, crypto trading, Bitcoin, regulation, India, GST
Countries: World