There is no explanation from the central bank about the country's legal status nor how to tax them locally.
Many banks did not receive any notification from the RBI to to start banking relationships again with cryptocurrency exchanges and businesses.
Also, it is not clear how these digital assets will be classified as a commodity, currency, or service (effect of taxing them under the GST)[1].
If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard. In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive,” said Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, a cyrptocurrency platform.
[1] https://azcoinnews.com/india-crypto-exchanges-are-seeking-clarity-on-their-taxation-obligations-from-rbi.html
