The Crypto ecosystem in India is quite a sensitive topic for a while. According to the reports, Bitcoin transactions in India may come under the purview of GST. As per estimations, India’s Bitcoin transactions volume totals over Rs. 40,000 crore p.a. According to the reports, the government is contemplating a proposal to impose 18% GST on bitcoin transactions.
The CEIB (Central Economic Intelligence Bureau), a finance ministry arm, has applied to CBIC (Central Board of Indirect Taxes & Customs). It suggests that the government could probably obtain Rs.7,200 crore in revenue annually by charging 18% GST on bitcoin trading. The CEIB serves as a think tank for the ministry and has directed a study on levying GST on cryptocurrencies.
Indian government to categorize Bitcoin under “Intangible Assets Class”
The publication citing finance ministry sources stated that CEIB had recommended bitcoins under the category of ‘intangible assets’ class. Moreover, it can impose a GST levy on all transactions. The board recommends that the cryptocurrencies can be treated as current assets. Moreover, there will be a GST imposition on the margins booked in its trading.
As cryptocurrency exchanges remain unregulated in India, it is a huge challenge for the government. It was particularly after the Supreme Court raised a two-year ban inflicted by the RBI on banks and financial institutions to trade with digital currencies. Presently, there is no regulator for cryptocurrency. Therefore a fear prevails of it being utilized for money laundering activities and undermining of legitimate currencies.
Earlier, the Enforcement Directorate (ED) arrested a crypto trader due to its money laundering inquiry to an online Chinese betting scam case. The central agency stated that Naisar Kothari, a resident of Bhavnagar Gujarat, was responsible for a scam of over Rs 1,100 crore. The ED arrested Naisar Kothari under sections of the PMLA (Prevention of Money Laundering Act). According to the reports, the scam accused two Chinese-based companies, especially M/s Linkyun Technology Private Limited and M/s Dokypay Pvt Ltd, following section 420, 120 B of Indian Penal code and Section 3 (1) of Telangana state gambling Act 2017.
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