India’s finance ministry is reportedly working on a comprehensive goods and services tax (GST) regime regarding crypto assets.
A source said that the authorities are still discussing the applicability of GST for crypto assets. Currently, it is levied on services, so they need to see if crypto assets are declared as a service or good. Previously, the government was considering imposing either an 18% or a 28% GST on crypto assets.
Another source said that a better understanding of how cryptocurrencies fit into our legal system is the prerequisite for deciding the GST rate. The GST will only be applied on the service fees or margin and not on the entire asset value, the publication conveyed, adding that the government is also examining the treatment of specific transactions, like mining or airdropped crypto tokens.
An Indian ministerial panel allegedly met at the end of June to discuss the GST taxation on crypto transactions. However, the officials did not come up with any decision from the meeting.
The Indian government has already begun taxing crypto income and transactions. A 30% tax on income from cryptocurrency assets came into effect on April 1. Moreover, a 1% tax deducted at source (TDS) on payment of crypto assets begun applying on July 1.
Meanwhile, the Indian government is also discussing the country’s crypto policy. The government plans to decide its stance on the legality of cryptocurrencies by early next year to qualify as Financial Action Task Force (FATF) compliant.