Move Subject to Council’s Approval
As reported on Bloomberg, India may soon levy an 18 percent Goods and Services Tax (GST) on cryptocurrency trading, notwithstanding their legal ambiguity in the country. Currently, the proposal is being considered by the Central Board of Indirect Taxes and Customs, and shall be presented before the GST council after it’s finalized.
As stated, the digital asset could be classified under “intangible goods,” on par with other software systems, with the authority adding that separate laws would be introduced to deal with the usage of cryptocurrencies for criminal activities.
Previously in December 2017, CCN reported on the Indian government’s crackdown on the cryptocurrency market, which saw both exchanges and traders scrutinized for dealing with and making money on digital assets. Legal authorities also sent a tax notice to over 500,000 traders, in a bid to collect huge taxes from their gains.
In April 2018, the Reserve Bank of India practically killed the cryptocurrency industry in the country, as it passed a statement asking all banks to withdraw their relationships with all cryptocurrency exchanges, including ending all banking services within three months of the directive.
Salient Points of The Tax Proposal
According to people with knowledge of the matter, who requested anonymity, the Income Tax department has realized the importance of taxing virtual currencies.
If the burgeoning digital asset market is not adequately taxed, it may add up to huge liabilities, which would make recovery difficult in the future. Thus, the proposal calls for immediate approval…