The Goods and Service Tax (GST) Council, the body in charge of making laws and regulating goods and services tax in India, is planning on treating cryptocurrencies like casinos and online betting. Currently, online betting, gambling, casinos, lottery, and horse racing in India attract 28% GST.
India Proposes 28% GST on Crypto
According to recent reports, the council has nominated a law committee that will spearhead a proposal to impose 28% GST on crypto related services.
The proposal affects all crypto activities including buying and selling cryptocurrencies on different crypto exchanges, storing purchased crypto assets in either centralized or decentralized wallets, and also staking crypto tokens on various platforms.
“They sell cryptos from foreign exchanges to people in India. So, this is a service, and currently, this is at 18 percent GST slab and classified as an intermediary service. Post the discussion at the law committee, this service is likely to be classified under a different head, under the list of services, where it could attract 28 percent GST if agreed upon by the law committee, fitment committee, and the GST Council,” sources familiar with the matter said.
If the council approves the proposal, which will likely be presented in the next meeting, crypto traders in the country may be forced to pay 28% GST tax on their transactions alongside the 30% income tax implemented earlier this year.
India’s Tax Imposition on Crypto and DeFi
Meanwhile, since the RBI ban on crypto was overturned in India, the country has been hostile towards crypto investors and companies by implementing unfavorable tax rules.
Earlier this year, the country implemented a 30% income tax on crypto revenues and 1% TDS on crypto transactions. While the income tax took effect on April 1, the TDS will take effect on June 1st.
Additionally, the the Central Board of Direct Taxes (CBDT) plans on imposing a 20% tax levy on interest earned from investing on DeFi platforms operating outside of India. The CBDT also plans to impose a 5% equalization levy on non-Indian crypto traders without Permanent Account Number (PAN) card details.
