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Govt Examining GST on Crypto Mining, Supply

The government is examining the applicability of goods and services tax (GST) on various cryptocurrency transactions including mining of these digital assets.

The issue is being examined internally at the Central Board of Indirect Taxes and Customs (CBIC) and a proposal will be taken to the GST Council, CBIC chairman Vivek Johri said.

“There are several aspects of the operation which interest with GST as a tax,” he said in an interview to ET. The budget has proposed a flat 30% capital gains tax on virtual digital currencies beginning April 1, 2022. The levy of GST on other transactions in them could raise the overall incidence of tax on cryptocurrencies.

Services provided by a platform, or an exchanges operator, were duly recognized as taxable services and authorities have been charging them to tax, Johri said.

However, the issue of supply of cryptocurrencies required more detailed examination, Johri added.

“You mine crypto…the first question is does that involve a supply or not. Second is, I acquired crypto and I’m selling it to somebody else or I’m using it for barter. How do we deal with that,” he said, pointing to some of the issues the department is looking into? “Is that a supply of money, or is that a supply of goods and services, or is it just an actionable claim?

These are the other aspects which involve the GST issue that we are examining at the moment,” he added.

Asked if it would be taken to the GST Council at its next meeting expected sometimes in March, he said:

“We’re trying, but it has to go through the process of the law committee and then go to the council.”

The issue is currently beings examined within the CBIC and it could take 2-3 months, he added. S-ET

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