Indian Government Could Soon Charge 18% GST On Bitcoin Transactions

Bitcoin trading in India isn¡¯t as popular as it is in countries like the US. However, it looks like the Indian government is on its way to take a keen interest in this as reports have revealed that trading in bitcoin could soon come under Goods and Services Tax (GST).

Reuters

Reported first by the Times of India, authorities estimate that annually, people transact around Rs 40,000 crores in bitcoins and looking at this major chunk, the Indian government wants to take a piece of it, as it is working on a proposal to impose 18 percent GST on bitcoin transactions.

This is according to the Central Economic Intelligence Bureau -- an arm under the finance ministry, who has pitched this proposal to the Central Board of Indirect Taxes and Customs or CBIC. CEIB claims that it could bring the government Rs 7,200 crores in revenue annually after the 18 percent GST imposition. To the uninitiated, CEIB acts as a think tank of the ministry and this number is based on a study on levying of GST cryptocurrencies.

According to sources cited in the report, CEIB has suggested categorising bitcoins as ¡®intangible assets¡¯ class while levying a GST on all transactions. As per the board, cryptocurrency can be termed as current assets and GST is charged on the margins made in its trading.

Cryptocurrency isn¡¯t as smooth sailing in India as it currently remains unregulated. The Supreme Court recently lifted its two-year ban that was imposed by the RBI on banks and financial institutions to deal with digital currencies. As of now, no regulator exists for cryptocurrency.

Reuters

But with GST being charged on transactions, it could be a start that could offer some more structure for dealing with this new kind of currency in India. It goes without saying that it¡¯s just a proposal for now, and nothing is sure or certain. All we gotta do is wait and watch.