GST Council Planning to Propose 28 Per Cent Tax on Crypto Currencies
GST Council is planning to impose 28 per cent tax on crypto currencies. This is dampening the mood of the crypto investors of the country to quite some extent. According to the report of multiple media of India, the Goods and Services Tax (GST) is being levied at the rate of 28% on Bitcoin, which is the same rate of tax imposed on casinos, betting, and lottery.
The GST Council is thinking to impose 28 per cent tax on crypto mining along with other sales and purchases. If the decision is approved in the next GST meeting, then 28 per cent tax will be permanently levied on crypto currency. The date of the next GST Council is not decided but expected to be held soon.
As per the decision of the Ministry of Finance, 30 per cent Goods and Services Tax (GST) is imposed on the profits that are earned from the purchase, sale, and transfer of crypto assets and non-fungible tokens (NFTs).
In India, crypto currencies and crypto assets are distinguished. While announcing the Union Budget 2022-23, Union Finance Minister Nirmala Sitharaman had announced that during the transactions of the crypto currencies and crypto assets, 30 per cent GST will be imposed from 1 April on the profits earned. The excess 28 per cent tax will be applicable in addition to the already applicable 30 per cent GST.
In these crypto transactions, 1 per cent TDS (tax deducted at source) is also applied above a particular level. The gifts earned in crypto transactions and digital assets are also charged with tax. The Ministry of Finance has added a new section related to tax digital assets called “115BBH” under the Income Tax Act, 1961.
While her trip to the United States last month, Finance Minister Nirmala Sitharaman had highlighted her doubts about the size of the crypto currency market across the globe. She emphasized upon the requirement of a regulatory mechanism that would be acceptable for the all the countries. This regulatory mechanism will be effective to prevent the use of crypto currencies for laundering money or for fund terrorism across the world. According to the statement of Nirmala Sitharaman, this is a matter of major concern for the country at present.
At a seminar which was hosted by the International Monetary Fund (IMF), Finance Minister Nirmala Sitharaman stated that the use of crypto assets for the purpose of laundering money or for promoting terror across the world is major concern for all the countries and the risk associated with it needs to be regulated. She added that the number and size of the crypto currency market is quite questionable. The volume of the market is not much big and the authenticity of the data is not certain.
On last Monday, the market value of Bitcoin has gone down by almost 2.7 per cent. It is being traded at $33,531. The value of Bitcoin, which is the largest crypto currency across the world by the market value, has gone done by 50 per cent from the peak since the month of November, 2021.