Gst board plans to levy 28% GST on cryptocurrencies

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The Goods and Services Tax (GST) Board will likely consider levying a 28% GST on cryptocurrencies. The government’s view is to keep cryptocurrencies on par with lottery, casinos, racetracks, betting, sources told CNBC-TV18.

The GST Board has appointed a legal committee to review the proposal to soon levy 28% GST on services and all activities related to cryptocurrencies. The views of the laws committee will then be tabled before the GST Board for a formal nod.

The proposal will likely be tabled at the next GST Council meeting, but no decision has yet been made on the date.

Currently, the 18% GST is levied only on services provided by crypto exchanges and is categorized as financial services.

Budget 2022-23 clarified the collection of income tax on crypto assets. From April 1, a tax of 30%, plus tax and surcharges, is levied on these transactions.

The budget also proposed a 1% TDS on payments to virtual currencies in excess of Rs 10,000 per year and taxation of such gifts in the hands of the recipient. The threshold limit for TDS would be Rs 50,000 per annum for specified persons, which includes individuals/HUFs who are required to have their accounts audited under the Information Technology Act.

Earlier this month, the panel of state finance ministers was unanimous in raising the GST rate on casinos, racetracks and online gambling services to 28%, the Bengal finance minister said western Chandrima Bhattacharya. However, a decision on whether tax should be levied on the gross or net assessment would be made after further deliberation at officer level.

Currently, casino, horse racing and online gaming services are subject to 18% GST.

With PTI entries

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