According to various media reports, the Indian Government is considering imposing a GST of 28% on cryptocurrencies.
A committee has been formed by the GST council to draft a proposal imposing 28% GST on all goods and services related to crypto.
The council will consider all the activities related to crypto such as trading of crypto tokens on exchange platforms, staking in various platforms, and holding crypto in centralised and decentralised wallets, before drafting the proposal.
The proposal will likely be presented to the GST council in its next meeting.
Currently, Indian crypto exchanges serve only as intermediaries, purchasing crypto from foreign exchange platforms for Indian crypto dealers. As a result, they are classified as intermediary services and are subject to a 28 percent GST charge.
Also Read: Indian Government Working on Classification of Crypto Under GST
Sources have said, “They will have to be classified separately under a new head, under the list of services. So, every transaction will be subject to 28 percent GST, if agreed upon by the GST Council.”
Currently in India, a GST of 28% is levied on casinos, race course, and online gaming which includes betting. Imposing 28% GST on crypto activities will basically classify the industry as a part of the gambling industry.
The Indian government has been against the rapidly increasing crypto industry, as MPs clearly express their dissent towards the industry and on the other hand, the Parliament passes stringent laws, heavily taxing crypto earnings.
Earlier this year, the Indian Parliament passed a bill which imposes a 30% tax on digital assets and nonfungible token transactions, along with a TDS of 1% on virtual currency payments greater than 10,000.
An additional GST of 28% would be a heavy blow to crypto traders and the nascent Indian crypto industry.
