Authorities in India are looking to introduce an additional 28% Goods and Services Tax on cryptocurrencies, CNBC reported.
India’s new 28% tax for crypto
According to the report, India’s Goods and Service Tax Council considers bracketing crypto investments in the same category as lottery, casinos, racecourses, and betting.
The report continued that the council had set up a law committee tasked with looking at this proposition and coming up with a rate that would be acceptable to the council.
CNBC reported that its sources had said the law committee would be looking at the various aspects of crypto, including its use as a payment method for goods and services and the angle of crypto exchanges based in the country acting as intermediaries.
Per the report:
(Crypto exchanges) sell cryptos from foreign exchanges to people in India. So, this is a service, and currently, this is at 18 percent GST slab and classified as intermediary service. Post the discussion at the law committee, this service is likely to be classified under a different head, under the list of services, where it could attract 28 percent GST if agreed upon by the law committee, fitment committee, and the GST Council.
India and its litany of crypto taxations
CryptoSlate had previously reported that India was working to extend its crypto taxations to include gains made from decentralized finance (DeFi) activities.
The report stated that India’s Central Board of Direct Taxes (CBDT) had been talking to experts on how it could implement this.
Apart from that, the country had also introduced a 30% taxation on all crypto gains. This law does not allow for deductions on losses meaning that all traders would be adversely affected.
Crypto legal status remains hazy in India
Despite all of these tax measures, the legality of crypto in India remains unknown. India’s Finance Minister Nirmala Sitharaman reportedly said that “taxing cryptocurrencies does not give them any kind of legal status.”
This lack of regulatory clarity has pushed crypto exchanges operating in the country to suspend fiat deposits. Meanwhile, the founders of the biggest crypto exchange in the country, WazirX — Nischal Shetty and Siddharth Menon — have been forced to move to Dubai due to this uncertainty.
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Author: Oluwapelumi Adejumo