In what could further spoil the mood of crypto investors in the country, the goods and services tax (GST) Council is likely to consider imposing 28 per cent tax on cryptocurrencies. The proposal is likely to be tabled in the next GST Council meeting.
According to reports the 28 per cent GST will be in addition to the 30 per cent income tax on earnings from crypto asset transactions.
The GST Council has constituted a committee which will soon take up the proposal to impose 28% GST on all a services related to cryptos, CNBC TV 18 reported.
Imposing 28 per cent GST on cryptocurrencies is another shocker for cryptocurrency community in India.
Ankur Gupta, Practice Leader ( Indirect Tax), SW India said that looking at the taxability of cryptocurrency under Direct Tax introduced this year, it was just a matter of time that the taxability under GST also moves from 18% to 28%. Now when it has been made agenda for the next council meeting, it should sail through without any hindrance as well.
However, the imposition of 28% GST and 30% direct tax, would surely bleed out the majority of the profits which people have earned over a period of time when these cryptos are materialized, he added.
Amit Gupta, MD, SAG Infotech said as we all have been hearing for a long time, the government is reportedly considering levying a 28 per cent GST on all crypto transactions, including mining, sales and purchase of cryptocurrencies. There is already a 30 per cent tax being levied on profits made from the sale of crypto assets and NFTs.
“This second GST on crypto transactions is expected to further increase problems for the crypto industry and might even discourage many investors to trade in these digital assets,” Gupta said.
Meanwhile, the 30 per cent ‘crypto tax’ proposed in the Union Budget came into effect from April 1, 2022. From July 1, 2022, 1 per cent Tax Deducted at Source (TDS) will be applicable on crypto transactions.