Highlights:
- The Indian crypto market is amidst shock after the GST Council plans on imposing 28% GST.
- This percentage would be applicable in addition to the 30% income tax on earnings from crypto asset transactions.
A huge spoiler for the crypto community of India, the Goods and Services Tax (GST) Council is contemplating on imposing 28% tax on cryptocurrencies. The proposal, currently, under the works, will be likely tabled in the next GST Council Meeting. As per reports, the 28 percent GST will be in addition to the already levied 30 percent income tax from crypto-based transactions.
The GST Council has set up a committee for the same, which will soon take up the proposal to impose 28% GST on all services, assets, and transactions related to cryptocurrency in the country.
Tax practitioners in India believe that after the direct tax has been imposed on cryptocurrency, it was hardly a matter of time that the assets become taxable under the GST and move from 18% to 28%. After the agenda has been established, it will be discussed in the next meeting, and many believe that it will be passed in favor without any hindrance.
A bleeding bid for the crypto community of India
The imposition of 30% direct tax and 28% GST is a discouragement for the crypto investors of the country as their entire profits would be drained in paying these heavily levied taxes. It would surely bleed out the profits which people have earned from cryptocurrency.
Quite honestly, the talks of the government imposing 28% GST on all crypto transactions, including the sale, purchase and mining of cryptocurrencies has been circulating for some time in the market.
A severe discouragement for the crypto industry of India
This second GST on crypto asset transactions will surely complicate things for the cryptocurrency market in the country and might even discourage investors from trading in these assets. Undeniably, the crypto industry is huge and needs rules and regulations but there must be a balance between how and when these rules are imposed.
In fact, the parent technology behind cryptocurrency, blockchain can be made secure enough and necessary regulations can be imposed in that sector. Layering the crypto transactions with taxes is not a solution to curb the situation or the regulate the crypto industry.
Meanwhile crypto experts brainstorm what it means, a 30% crypto tax as proposed in the Union Budget came into effect on April 1, 2022. Moreover, a 1% TDS will be applicable on crypto transactions from July 1, 2022.
