India – the world’s second-largest country by population, is reported to consider to apply consumption tax on cryptocurrency. After months with activities against digital asset, the regulators of this country finally give crypto investors some hopes by eventually accepting cryptocurrency.
According to Bloomberg, India is working on a proposal to levy an 18% Good and Service Tax (GST) on crypto trading. Currently, The Indian Central Board of Indirect Taxes and Customs is considering this proposal and may soon announce the result. If it is approved, GST council will apply it in nationwide scale.
As reported, crypto can be classified as “intangible goods” which is also in the same category with software systems
The value of a transaction will be converted to rupees or an equivalent n freely convertible foreign currency. In case the transaction beyond India, it will be liable for Integrated Good and Service Tax (IGST) and would be considered as import and export activities.
Meanwhile, with crypto mining, all related activities including verifying, transferring, storing and maintain the network shall be treated as supply of service and also have to pay GST in the return commission. Same as oversea crypto transactions, foreign exchange or other activities would be liable for IGST.
With cryptocurrency exchanges having a revenue of 2000 million rupees ($20 million) monthly, it is no doubt that the government has considered as if it was a gold digging. If tax regime is valid from now to the next ten months, it would bring 3600 million Indian Rupees to the Indian government.
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