By George Ward
The Central Board of Indirect Taxes and Customs (CBIC) is a regulatory body in India. It has expressed tax concerns over the transactions of crypto assets done on the platforms of India-based crypto exchangers. One of the functions of this body is the ability to formulate policies and collect indirect taxes.
The GST (Goods and Services Tax) was implemented by the CBIC to replace other indirect taxes such as service tax, purchase tax, value-added tax, and others. This GST is based on India’s demand and supply of specific goods and services.
Per the CBIC request, each of the major crypto exchanges in India must provide details about the crypto assets transactions that took place on their platform and the fair value of these traded digital assets.
Some Important Notes
The information the crypto exchanges provide on crypto asset transactions will enable the CBIC to implement applicable GST on newly-listed asset classes with high future potential. In addition, some crucial details are of interest to the CBIC. These details include the transaction fees and the most commonly traded crypto assets.
Furthermore, the CBIC is reconsidering whether to include cryptocurrency asset taxes under GST laws. It is noteworthy that Indian crypto exchanges currently pay 18% GST on their services. Worryingly, the Indian tax authorities are considering increasing the GST paid by crypto exchanges to 28%.
If that happens, it means crypto exchanges will be paying taxes similar to casinos, lotteries, and other types of gambling-related companies in the country.
Remember that India currently slaps a 30% flat tax on each income generated through crypto. Also, a 1% tax is deducted at source for any transaction exceeding 10,000 Indian rupees (or the equivalent of $120 based on current exchange rates).
Unfortunately, India’s tax authorities make no provision to offset these losses with gains from other transactions. India’s crypto industry remains one of the fastest-growing crypto sectors globally. Hence, any issue affecting its crypto sector may have a ripple effect on other nations’ crypto sectors.