Government anticipating classifying crypto under GST law

The Centre is working on the categorization of crypto under the GST law so that tax can be imposed on the complete value of the transaction. As of now, 18% Goods and Services Tax (GST) is imposed just on services offered by the crypto exchanges and is classified as financial services.

GST officers said that cryptos are akin to gambling, casinos, betting, which have 28% of the GST on the complete value. Apart from that, GST at 3% is imposed on the complete transaction value in the case of gold.

According to another GST official, if GST will be imposed in the complete transaction of cryptos then the rate would be in the range of 0.1-1%. However, firstly the ‘classification’ decision will have to be finalized and then the rate will be talked about.

The GST hasn’t made a categorization of crypto. In the absence of a law regulating such virtual currencies, the categorization has to take into account if the law categorizes it as an actionable claim. An actionable claim is a claim which can be made by a creditor, for any type of debt besides a debt protected by a mortgage of immovable assets.

The 2022-23 Budget has brought in clarity about imposing income tax on crypto assets. From April 1, a 30% I-T plus surcharges and cess, will be imposed on such transactions in the same way as it considers lottery, gambling, and other speculative transactions.

Author: Diksha Khiatani

A writer by day and a reader at night. Emerging from an Engineering background, Diksha is a travel freak and anxious to explore different cultures and religions. Inclined towards the off-beat places, she wishes to uncover the secrets on her Scooty (if possible). She always grabs some time to take a quick nap, listen to music, skating and eat a brownie.

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