Govt working on GST on crypto transactions

Nirmala Sitharam-led finance ministry is planning to define the characteristics of cryptocurrencies, their use, and how they fit into the existing legal framework, people aware of the development told Livemint. The ministry, after deciding its legal nature, will fix the GST rate for cryptocurrencies, as it could be in a new GST slab rate, between 18 per cent and 28 per cent, reported Livemint, quoting its sources.

“We are still discussing the applicability of GST in case of crypto assets right now, it is levied on services so we need to see if crypto assets are declared as a good or service. We can have a special rate for it. It may not necessarily be 18 per cent or 28 per cent. Maybe somewhere between that. We have had a few discussions on it and will arrive at a decision soon,” one of the two people told Livemint.

“A better understanding of how cryptocurrencies fit into our legal system is the pre-requisite for the decision on the GST rate,” the second person told the newspaper.

This comes amid heated debates on crypto assets in India as the Reserve Bank of India has said they are a threat to the nation’s financial stability. On the other hand, the central government is in touch with multilateral agencies and the Bank for International Settlements to develop a consensus on regulating such assets, reported Livemint.