The authorities of India are working on a proposal that will allow authorities to impose Goods and Services Tax on cryptocurrency transactions, despite the legal uncertainty of this kind of activity in the country.
India intends to impose an 18% fee on cryptocurrencies trading after several months of spreading negative information about this class of digital assets. Сryptocurrencies could be classified as “intangible goods.”
An anonymous source told Bloomberg that the Central Board of Indirect Taxes and Customs is considering the proposal at the moment.
“Purchase or sale of cryptocurrencies should be considered as supply of goods, and those facilitating transactions like supply, transfer, storage, accounting, among others, will be treated as services. If buyers and sellers are in India, the transaction would be treated as a supply of software and the buyer’s location will be the place of supply,” – according to Bloomberg.
Mining is considered as the provision of services and is taxed in accordance with the laws of GST. In addition, miners who earn more than Rs 20 from their computers have to register under the GST.
In December, the Indian government ctreated a number of restrictions regarding the cryptocurrency market during which both exchanges and traders carefully studied the possibility of working with digital assets and making money for them. The legal authorities also sent tax notices to more than 500,000 traders in an attempt to collect huge taxes from their profits.
In April of 2018, the Reserve Bank of India almost destroyed the cryptocurrency industry in the country, demanding that all banks in the country cease business relations with crypto exchanges. Soon after, more than 16,000 Indians signed a petition against the irrational decision of the bank.
By Ekaterina Ulyanova