GST net on crypto may expand, could attract highest rate
NEW DELHI: The government may expand the indirect tax net over cryptocurrencies to cover the entire gamut of activities, including their usage for exchanging goods and services, at the highest slab of 28% as many parliamentarians have demanded to treat them at par with lotteries and gambling, two people aware of the development said.
Although the finance ministry has already imposed a 30% income tax on earnings from virtual digital asset transactions from April 1, there are still several aspects pertaining to goods and service tax on cryptocurrencies, such as its mining, sale and purchase, and their exchange value when used for buying or bartering goods and services. This matter is under consideration as all such activities may attract GST, they said, requesting anonymity.
“Tax proposals will be analysed by the law committee, which will recommend its views to the GST Council for its consideration,” one of them said.
While the law committee on GST comprises of 23 bureaucrats representing indirect tax matters from the Centre and states, the GST Council is the apex decision- making body. The Council is chaired by the Union finance minister and finance ministers of states are its members.
One aspect of cryptocurrency is already covered under the indirect tax regime — services provided by crypto exchanges for their sale and purchase attract 18% GST, the second person said.
The GST Secretariat, the Central Board of Indirect Taxes and Customs (CBIC), the Union finance ministry, the group of ministers (GoM) on rate rationalisation, and the GoM on casinos, gambling and online gaming did not respond to email queries on this matter.