Govt working to classify cryptocurrency under GST Law
March 21, 2022
The government is working on the classification of cryptocurrency as goods or services under the GST regulation, so that tax can be levied on the entire value of transactions.
Right now, 18% Goods and Services Tax (GST) is levied only on services provided by crypto exchanges and is categorized as financial services.
GST officers are of the view that cryptos, by nature, are like lottery, casinos, gambling, betting, which have 28% of GST on the entire value. Also, GST at 3% is collected on the entire transaction value in the case of gold.
“There is a clarity needed in regard to levy of GST on cryptocurrency and whether it must be imposed on the entire value, we are seeing whether cryptocurrencies can be named goods and products and furthermore eliminating any uncertainty on whether it very well may be called an actionable claim,” an official said.
Another official said that the GST is levied on the entire transaction of cryptocurrency, the rate could be in the range of 0.1 to 1 percent.
“Discussions are in a beginning stage on the rate of tax, whether it would be 0.1 percent or 1%. First, a decision on classification should be finalized and then the rate will be discussed,” the official told PTI.
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