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Government exploring ways to levy GST on cryptocurrencies
February 09, 2022
Post introduction of the new direct tax system for virtual digital assets, the Government is searching for ways of collecting Goods and Services Tax (GST) on the mining of such an asset, popularly known as cryptocurrency.
The key issue here is whether to treat mining as goods or services. As per Subhash Chandra Garg Committee that proposed specific actions to be taken in relation to virtual currencies (2019), “‘Mining’ signifies an action aimed toward creating a cryptocurrency and validating a transaction of cryptocurrency between the buyer and seller of cryptocurrency.”
“Mining is key to VDA transaction. The Government is now thinking of how to tax such a thing. Initial, a call is to be taken as whether to treat mining as goods or services and afterward, besides, place it accordingly in a classification according to the GST perspective,” a senior government official told BusinessLine. As of date, commission for working with trading cryptocurrency draws in GST.
In any case, specialists feel burdening the mining is incredibly difficult. To begin with, mining is extremely low in India. Besides, following the digger and burdening them is troublesome as they are situated external to the country. Also, thirdly, will the trade be liable to pay GST, in case the miner is not located here.
Kanwal Prakash Singh, Head of Quant with CoinDCX said that any platform which provides infrastructure for mining is a standard case of service providers.
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