Topic: [2018-01-05] India's Bitcoin Exchanges seeking clarity over levy of GST (Read 78 times)
January 05, 2018, 03:57:35 AM
There is a lot of ambiguity in regards to the tax to be paid by the users who have made a profit from it. Although, government authorities have warned against cryptos. Seems like it's making no difference as transactions are at an all time high, as 11 per cent of all BTC transactions being done in India. Remains to be seen if government sees BTC transactions as trading then it will come under income tax slab of 10%-30%. If they see it as non-business asset transfer then it is capital with tax of 15% on long run and 30% in short.
January 05, 2018, 02:50:52 AM
MUMBAI: Are Bitcoin exchanges required to pay goods and services tax? If they are, what would the rate be? And, will GST be levied on the revenues or operating margins of these exchanges?
India's top seven Bitcoin exchanges, which include Zebpay, Unocoin, CoinSecure and BtcxIndia, plan to approach the Advance Authority of Ruling (AAR) for clear answers to these questions, two people with direct knowledge of the matter told ET. AAR is a quasi-judicial body that can decide the applicability of tax rates.
"At least one Bitcoin exchange has already filed an application with the Maharashtra AAR for future tax liability," said one of the persons cited above. "The tax department is currently researching the concept as Bitcoins are a very complex subject." Zebpay, Unocoin, CoinSecure and BtcxIndia didn't respond to queries.
The development follows the income-tax department conducting searches at top Bitcoin exchanges in December. The indirect tax department is already looking at ways in which Bitcoins can be brought under GST. ET reported in December that the indirect tax department had launched an investigation into Bitcoin exchanges operating in India to ascertain the GST rate that can be levied on them. The sales tax department and VAT authorities launched an investigation on the taxability of Bitcoins in the last financial year.
For the exchanges, the rate could depend on what the authorities deem Bitcoins to be — goods, services or currency. If Bitcoin is held to be a currency, there will be no GST. If it's a good, then tax of 18% could be levied, and 12% if deemed to be a service.
"The question for many Bitcoin players is whether GST is applicable on the total revenue or on the margins they earn," said Abhishek A Rastogi, partner at law firm Khaitan & Co. "This is mainly because the tax authority must give clarity on whether Bitcoin exchanges are selling goods and services, or are mere trading platforms that earn margins."
Read more at: https://economictimes.indiatimes.com/markets/forex/bitcoin-exchanges-seeking-clarity-over-levy-of-gst/articleshow/62374337.cms
India's top seven Bitcoin exchanges, which include Zebpay, Unocoin, CoinSecure and BtcxIndia, plan to approach the Advance Authority of Ruling (AAR) for clear answers to these questions, two people with direct knowledge of the matter told ET. AAR is a quasi-judicial body that can decide the applicability of tax rates.
"At least one Bitcoin exchange has already filed an application with the Maharashtra AAR for future tax liability," said one of the persons cited above. "The tax department is currently researching the concept as Bitcoins are a very complex subject." Zebpay, Unocoin, CoinSecure and BtcxIndia didn't respond to queries.
The development follows the income-tax department conducting searches at top Bitcoin exchanges in December. The indirect tax department is already looking at ways in which Bitcoins can be brought under GST. ET reported in December that the indirect tax department had launched an investigation into Bitcoin exchanges operating in India to ascertain the GST rate that can be levied on them. The sales tax department and VAT authorities launched an investigation on the taxability of Bitcoins in the last financial year.
For the exchanges, the rate could depend on what the authorities deem Bitcoins to be — goods, services or currency. If Bitcoin is held to be a currency, there will be no GST. If it's a good, then tax of 18% could be levied, and 12% if deemed to be a service.
"The question for many Bitcoin players is whether GST is applicable on the total revenue or on the margins they earn," said Abhishek A Rastogi, partner at law firm Khaitan & Co. "This is mainly because the tax authority must give clarity on whether Bitcoin exchanges are selling goods and services, or are mere trading platforms that earn margins."
Read more at: https://economictimes.indiatimes.com/markets/forex/bitcoin-exchanges-seeking-clarity-over-levy-of-gst/articleshow/62374337.cms
Jump to: