Officers Committee recommends postponing the decision on the imposition of GST on cryptocurrencies
New Delhi:
The GST Officials’ Committee has recommended the GST Council to postpone its decision on cryptocurrencies and other virtual digital asset taxes.
In its report to the GST Council, the Equipping Committee suggested that a law on crypto regulation is pending. It will be essential to identify all relevant supplies related to the crypto ecosystem, in addition to classifying them as goods or services.
The committee made up of officials from the Center and the states, known as the Equipping Commission, felt that there was a need for a more in-depth study of the issues related to the cryptocurrency ecosystem.
It was decided that Haryana and Karnataka would study all the aspects and submit a paper before the Health Committee in due time.
The Commission feels that it is necessary to identify all relevant sources of supply related to the crypto ecosystem under GST regulation; their nature, whether the activities are goods or services and their applicable rates.
It therefore suggests that the Council cancel its decision on the taxation of cryptocurrencies at its next meeting on June 28-29.
Budget 2022-23 clarified the taxation of income on crypto assets; however, in terms of Goods and Services Tax (GST), the classification of a cryptocurrency as a good or a service remains unclear.
From April 1, a 30% income tax plus taxes and surcharges is levied on such transactions in the same way that winnings from horse races or other speculative transactions are treated.
TDS 1% on payments over Rs 10,000 in virtual currency has also been introduced, which will come into effect from 1 July.
The threshold limit for TDS will be Rs 50,000 a year for designated persons, including individuals/HUFs required to audit their accounts under the IT Act.
