The Indian Government had imposed a 30% tax on all crypto transactions in the country alongside a 1% TDS charge on each transaction. However, the GST council of India is looking to finalize further taxation on crypto, putting it at the highest tax slab of 28%.
According to media reports, the Council is seeking to broaden the tax net to track dealings in virtual digital assets more effectively. They’ll decide this at the 47th meeting of the GST council on 28-29 June at Chandigarh.
Previously, the Finance Minister of India, Nirmala Sitharaman, announced that the Government will levy a big tax rate of 30% on virtual assets. This included cryptocurrency and non-fungible tokens or NFTs. Moreover, the Indian Financial Budget also included the provision for 1% TDS on each crypto transaction.
However, the GST council will not limit itself with the decisions taken on crypto. The Council will discuss plans to shift rate labs and a proposal to correct inverted duty structure in textiles. It might discuss a proposal to change rate slabs from the current five percent to seven or eight percent, and from 18 percent to 20 percent.
Currently, there are 4 GST slabs in the country: 5%, 12%, 18%, and 28%. The biggest number of items comes under the 18% tax slab. Moreover, the 18% tax slab contributes to about 70% of the GST collections. Also, there is a list of exempted items such as unbranded and unpacked food items that do not attract the levy.