Officers’ committee suggests deferring the decision to impose GST on crypto
New Delhi:
The Committee of Officers on GST has suggested the GST Council to defer the decision on cryptocurrency and other virtual digital assets tax.
In its report to the GST Council, the fitment committee has suggested that a law on cryptocurrency regulation is awaited. It will be necessary to identify all relevant supplies associated with the crypto-ecosystem, in addition to classifying whether they are goods or services.
The committee of officials from the Center and the states, called the Fitment Committee, felt that the issues involved in the crypto ecosystem required in-depth study.
It was decided that Haryana and Karnataka would study all the aspects and submit a paper before the fitment committee in due course.
The Committee felt that it was necessary to identify all relevant supplies linked to the crypto-ecosystem within the purview of GST; their nature, whether those activities are goods or services and their applicable rates.
Therefore, it suggested that the council defer the decision on the taxation of cryptocurrencies to its next meeting on June 28-29.
The budget for 2022-23 has clarified the imposition of income tax on crypto assets; However, on the goods and services tax (GST) front, the classification of cryptocurrency whether it is goods or services or not is still unclear.
With effect from April 1, 30 per cent income tax and cess and surcharge are levied on such transactions in the same manner as it treats winnings from horse racing or other speculative transactions.
1 per cent TDS has also been introduced for virtual currencies on payments above Rs 10,000, starting July 1.
The TDS limit will be Rs 50,000 per annum for specified persons, including individuals/HUFs who are required to get their accounts audited under the IT Act.