According to reports, India’s finance ministry is investigating how the goods and services tax (GST) could be applied to cryptocurrency transactions. “A greater grasp of how cryptocurrencies integrate into our legal structure is required before determining the GST rate,” a source told local media.
The Goods and Services Tax (GST) in India may soon apply to cryptocurrency transactions.
According to Livemint, India’s finance ministry is working on a comprehensive goods and services tax (GST) regime. According to a source who spoke to the publication:
The decision on the GST rate is contingent on a greater understanding of how cryptocurrencies fit into our legal structure.
The GST will only apply to the margin or service fees, not the total value of the asset, according to the publication, which also stated that the government is looking at the treatment of some transactions, such as mining or airdropped crypto tokens.
According to reports, an Indian ministerial panel convened at the end of June to consider the GST tax on cryptocurrency transactions. The officials, however, did not reveal the outcome of the meeting.
The Indian government has already begun taxing cryptocurrency earnings and transactions. On April 1, a 30% tax on profits from crypto assets went into effect. Furthermore, on July 1, a 1% tax deducted at source (TDS) on crypto asset payments went into effect.
Meanwhile, the Indian government is developing the country’s cryptocurrency policy. In order to become FATF-compliant, the government intends to formalize its position on the legality of cryptocurrencies by early next year. Nirmala Sitharaman, India’s Finance Minister, has also encouraged the International Monetary Fund (IMF) to take the lead in building a worldwide framework for cryptocurrency.