Postpone decision on Crypto GST, propose committee of officials

Committee of Officials proposes postponement of decision on levy of GST on crypto

New Delhi:

The officials committee on GST proposed that the GST board postpone a decision on the cryptocurrency and other virtual digital assets tax.

In its report to the GST board, the Adaptation Committee suggested that a law on the regulation of cryptocurrencies be awaited. The identification of all relevant inventories associated with the crypto-ecosystem will be essential, except to classify whether they are goods or services.

The Committee of Center and State Officers, referred to as the Adaptation Committee, felt that a deeper study was needed on the issues involved in the crypto-ecosystem.

It was decided that Haryana and Karnataka would study all aspects and in due course submit a paper to the Adaptation Committee.

The committee felt that it was required to identify all relevant stocks associated with crypto-ecosystem under the scope of GST; their nature, whether those activities are goods or services and their appropriate rate.

Therefore, it proposed that the Council postpone a decision on the taxation of cryptocurrency at its next meeting on 28-29 June.

The 2022-23 budget clarified the imposition of income tax on crypto-assets; on the Goods and Services Tax front (GST), however, the classification of cryptocurrency is not yet clear whether it is goods or services.

From April 1, an income tax of 30 percent plus co-payments and co-payments on such transactions will be levied in the same way as it deals with profits from horse racing or other speculative transactions.

A TDS of 1 percent on payments of more than Rs 10,000 against virtual currencies has also been introduced, which will take effect from 1 July.

The threshold limit for TDS will be Rs 50,000 per year for specific persons, which includes individuals / HUFs who are required to have their accounts audited in accordance with the IT Act.

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