In India, authorities intend to increase the tax burden on the cryptocurrency sector, according to CNBC-TV18 citing a source.
«The proposal is to levy 28% GST on services and all activity related to digital assets», the source explained.
According to him, the GST Council’s legal committee is currently examining the issue. After approval, the initiative will be forwarded for consideration and approval.
GST is an indirect tax levied on all goods and services in the country. Under the current system, the rate for cryptocurrency transactions, classified by exchanges as financial services, stands at 18%.
In India, the 28% levy applies to the online gambling sector. Sources explained that the aim of the proposal is to bring cryptocurrency-specific taxes in line with rates applied to gambling, lotteries and horse racing.
Earlier authorities imposed a 30% tax on profits from cryptocurrency transactions and the controversial 1% levy within TDS. Prior to this the Ministry of Finance determined that when calculating it traders would not be able to offset losses in one digital asset with gains in another.
Over the past years, statements by Indian authorities regarding legislative initiatives for cryptocurrencies have ranged from a total ban on digital currencies, even with criminal liability, to possible regulation as assets.
In January 2022 the prime minister Narendra Modi called for a unified approach in shaping the regulatory framework for the crypto industry.
In May, the Computer Emergency Response Team issued a directive obliging cryptocurrency exchanges to retain customer data for five years. Authorities say this is intended to deter tax evasion.
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