November 18, 2021

No More 18%GST Tax, India Wants To Reduce To 1%

 India is likely to reclassify the cryptocurrency exchange as an e-commerce platform, thus pushing for a reduction in the goods and services tax (GST) that consumers have to pay to 1% per trade.

Currently, the GST rate charged on registered cryptocurrency exchange platforms is 18% for each transaction carried out.

However, the proposed introduction of a new GST rate could result in more tax liabilities for certain consumers, depending on the country of origin of the platform.

In July, the country had demanded foreign cryptocurrency exchanges to impose GST of 18%, equivalent to the domestic rate on their Indian -born customers.

This is unexpected as foreign exchanges are usually exempted from GST registration to invite tax gaps between different exchange platforms.

At the same time, Indian lawmakers are still active in drafting a legal framework for cryptocurrencies in the country.

Several aspects are in focus, ranging from the classification of cryptocurrencies as a commodity to the ban on digital asset trading activities.

For the record, last year the Court of India lifted restrictions on the conduct of business between banks and cryptocurrency companies as stipulated by the Bank of India (BOI).