The Indian authorities are working on a proposal that will allow to impose transactions using cryptocurrency tax on goods and services (GST), writes Bloomberg.
According to an anonymous source, who has “reliable information” about the plans, the Central Council for Indirect Taxes intends to impose an 18% fee on the exchange of cryptocurrencies, which from now will be qualified as the transfer of “non-material goods”.
“The purchase and sale of cryptocurrencies should be considered as the delivery of goods, and those who are involved in the process of processing transactions, whether delivery, transfer, storage, accounting or anything else, will receive service status,” the publication says.
India has not yet established a formal regulation of the cryptocurrency, despite attempts by the central bank to limit activities in this area.
In April, the Reserve Bank of India banned regulated financial institutions from servicing crypto-exchange companies, which, however, did not prevent the opening of new exchanges.
If the provision on taxation of the cryptocurrency is adopted, it can serve as a signal to recognize the legality of digital assets and review the prohibitions imposed earlier.
“If the buyer and seller are in India, the transaction will be qualified as the delivery of software, and the buyer’s location will be considered the delivery point,” Bloomberg writes. “Trans-border transactions will be subject to a single tax on goods and services and will qualify as imports or exports of goods. The tax will be levied both in the international supply of goods and services.”
The authorities of India are not the first time trying to impose a tax on the participants of the local market of cryptocurrencies. In February, about half a million traders received letters stating that they need to report on the income received from the trade in cryptocurrencies.