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The Council is considering imposing a 28 percent tax on cryptocurrency transactions

According to CNBC TV18, India's Goods and Services Tax (GST) Council will decide shortly whether to broaden the scope of relevant transactions and collect a 28 percent GST on all services and activities related to cryptocurrency.

The GST Council, which is chaired by the country's finance minister, is the highest decision-making body. The council's law committee has been tasked with forming an opinion on the GST problem surrounding cryptocurrency. According to the publication's sources:

"The transactions using cryptos, cryptos being used to make purchases, and cryptos being received as payments are all examples of cryptocurrencies. All of these issues are being investigated, and the law committee will address them."

"Tax suggestions will be examined by the legal committee, which will submit its recommendations to the GST Council for consideration," a source familiar with the situation said.

According to the sources, cryptocurrency exchanges in India are now categorised as "intermediary services" and are subject to an 18 percent GST. "They'll have to be classed differently," the sources said, adding:

"If the GST Council agrees, every transaction will be subject to a 28 percent GST."

The current GST rate for online gaming (without betting) is 18%. Online games that involve betting or gambling, on the other hand, are subject to a 28 percent GST.

A handful of lawmakers have called for bitcoin transactions to be classified as gambling. "Several MPs urged that the GST on cryptocurrencies, like gambling and lotteries, be raised to 28 percent," a source familiar with the matter said. Because Parliament is the highest legislative body, the law committee will look at their demands."

Saket Patawari, an executive director at tax advisory firm Nexdigm, commented on the Indian government's decision to broaden the scope of transactions liable to GST:

"Currently, just a portion of the services supplied by crypto exchanges is taxed. Applying a 28 percent tax rate to the entire transaction might give the markets a boost "e drop."

In India, cryptocurrency income is currently taxed at 30%. Furthermore, on July 1, a 1% tax deducted at source (TDS) would be imposed on bitcoin transactions.

In the meantime, the Indian government is developing a crypto policy. On cryptocurrency legislation, authorities from the Finance Ministry have been talking with the International Monetary Fund (IMF) and the World Bank.

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