Cryptos Goods or Services? Work is on

The government is working on classifications of cryptocurrency as goods or services under the GST law, so that tax can be levied on the entire value of transactions.

Currently, 18 per cent Goods and Services Tax (GST) is levied only on service provided by crypto exchanges and is categorized as financial services.

Officers are of the view that cryptos are similar to lottery, casinos, betting gambling, horse racing, which have 28 percent of GST on the entire value. Besides, GST at 3 percent is levied on the entire transactions value in case of gold. “There is a clarity needed in regard to levy of GST on cryptocurrencies and whether it has to be lived on the entire value. We are seeing whether cryptocurrency can be classified as goods or service and also removing any doubt on whether it can be called an actionable claim,” an official said.

Another official said if GST is levied on the entire transaction of cryptocurrencies then the rate could be in the range of 0.1 to 1 percent. “Discussions are in a nascent stage on the rate of tax, whether it would be 0.1 percent or 1 percent. First a decision on classifications will have to be finalized and then rate will be discussed,” the official told PTI.

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