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Postpone Decision On Crypto GST, Suggests Officers’ Committee

The 2022-23 Budget has clarified the levy of income tax on crypto assets; however, on the Goods and Services Tax (GST) front, the classification of cryptocurrency as to whether it is goods or services is still not clear.

Representative image. (Source: Pexels)

New Delhi: The officers’ committee on GST has suggested the GST Council defer a decision on the cryptocurrency and other virtual digital assets tax.

In its report to the GST Council, the Fitment Committee has suggested that a law on cryptocurrency regulation is awaited. Identifying all relevant supplies associated with the crypto-ecosystem would be essential, besides classifying whether they are goods or services.

The committee of officers from the Centre and states, referred to as the Fitment Committee, felt that a deeper study was needed on the issues involved in the crypto ecosystem.

It was decided that Haryana and Karnataka shall study all aspects and submit a paper before the Fitment Committee in due course.

Hence, it suggested that the Council defers a decision on the taxation of cryptocurrency in its next meeting on June 28-29.

The 2022-23 Budget has clarified the levy of income tax on crypto assets; however, on the Goods and Services Tax (GST) front, the classification of cryptocurrency as to whether it is goods or services is still not clear.

From April 1, a 30 per cent income tax plus cess and surcharges are levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.

A 1 per cent TDS on payments over ₹ 10,000 towards virtual currencies has also been introduced, which will kick in from July 1.

The threshold limit for TDS would be ₹ 50,000 a year for specified persons, which includes individuals/HUFs who are required to get their accounts audited under the I-T Act. 

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