It looks like the Indian Government is going to impose some more taxes on crypto transactions. According to the recent reports, besides the 30% tax on crypto services and 1% TDS on crypto transactions, the Indian government is further imposing a 28% GST on all crypto transactions.
According to CNBC TV18, India’s Goods and Services (GST) Council is about to make a decision on levying 28% GST on all services related to crypto. In fact, the finance minister of the country chairs the council that has nominated its law committee for deciding about GST relating to cryptocurrency. They said:
“There are various aspects of cryptocurrencies — the transactions involving cryptos, cryptos being used to make purchases, cryptos being received as payments. All these aspects are under examination and will be discussed by the law committee.“
As of now, all the crypto exchanges in India pay 18% GST since the council considers them as “an intermediary service”. However, sources state that the council should make further classifications:
“Every transaction will be subject to 28% GST, if agreed upon by the GST Council.“
Besides this, many parliament members have demanded that crypto transactions should have equivalence compared to gambling.
However, many people outside the crypto community are apprehensive about this move. Moreover, they believe that additional taxation could make markets go frenzy. Saket Patawari, executive director at tax consultancy firm Nexdigm said:
“Currently tax is levied only on the part of the services provided by crypto exchanges. Subjecting the whole transaction to tax at a higher slab of 28% could give the markets a free fall.“