COMPANIES

No Data Found

NEWS

No Data Found
Advertisement
Govt may impose reverse charge on foreign crypto trade

Govt may impose reverse charge on foreign crypto trade

As per tax experts, a reverse charge if applicable could be taxed at 18 per cent on commission that is being earned through transactions on foreign crypto exchanges.

Karishma Asoodani
Karishma Asoodani
  • Updated May 14, 2022 1:42 PM IST
Govt may impose reverse charge on foreign crypto trade The centre is also evaluating aspects related to rate and valuation on which cryptocurrency will be taxed.

The government is in the final stages of considering a 'reverse charge' on Indians investing in virtual digital assets on overseas crypto platforms.

Sources have told Business Today TV that whenever a registered person (an Indian investor in case of virtual digital assets) is procuring a supply from an unregistered supplier, (the financial intermediary, which is a foreign crypto exchange); the receiver will pay have to pay the goods and services tax (GST) on reverse charge basis. 

Advertisement

"If a crypto exchange is based out of India, and is not impacted from GST implication, then the receiver who is based out of India will be liable to pay GST on reverse charge basis. This could be reflected in 4B of GSTR-1 and is in the final stages of discussion now " a Finance Ministry official said. 

As per tax experts, a reverse charge if applicable could be taxed at 18 per cent on commission that is being earned through transactions on foreign crypto exchanges. 

The centre is of the view that there is much clarity in the law on the applicability of GST on virtual digital assets. "The legality of virtual digital assets could be considered under schedule 2 of The Central Goods and Services Act, 2017 which mentions of the activities or transactions to be treated as supply of goods or supply of services," added a source.

Advertisement

The centre is also evaluating aspects related to rate and valuation on which cryptocurrency will be taxed. Currently, the government is charging 18 per cent GST on financial intermediaries that deal with buying and selling of cryptocurrency. However, it is yet to clarify how cryptocurrency and services like crypto mining will be taxed. 

 "It is unlikely to tax crypto on the total value of transaction, per say. The discussions are at a stage that needs further deliberations. However, we will consider view of law committee and fitment committee before the matter is taken further." said a govt official. 

The government is yet to finalise a date to convene the 47th GST Council meeting. In all likelihood, the council could meet in the last weekend of this month.

Advertisement

Also read: Washout! Terra down 100%, crypto exchanges de-list LUNA and UST 

Also read: Terra Luna crash turns value of 4th biggest crypto to zero, all cryptocurrencies in free fall

Published on: May 14, 2022 1:42 PM IST
Post a comment0