In the budget presented on February 1, the central government took a big decision regarding cryptocurrency. The government has announced a 30% tax on profits from cryptocurrencies. Now the discussion of imposing Goods and Services Tax (GST) on this by the government has also started. In fact, the government has placed cryptocurrencies in the category of horse racing and lotteries and currently, private lotteries and horse racing have to pay 28 percent GST. In such a situation, if the government keeps cryptocurrency in this category, then 28 percent GST may have to be paid on it. However, no information has come from the government regarding GST yet.
Let us tell you that considering crypto as virtual digital assets, the government has imposed 30 percent income tax in the budget considering crypto as an asset. It has been recognized for Rs. Experts say that if it is not given the status of securities, then GST will also be levied on the purchase and sale of crypto. Income from any source, which is not mentioned in the taxable category, is chargeable to income tax under the Income Tax Act 1961. At the same time, if no special exemption has been given on the supply of any service, then GST will be applicable on it. Since there is no such exemption for cryptocurrency, it may also come under GST.
Also as per section 2(75) of GST, money means Indian legal tender or foreign currency covered under FEMA Act. Most of the virtual currency does not come under this definition. Therefore they cannot be considered as money.
Notably, Indian crypto exchanges already charge GST trading charges. Exchanges pay GST to the government as part of their normal tax payments.