India considers 18% GST on bitcoin
- Jan 7, 2018 | Richard Asquith
India has started at the end of last year reviewing the tax and GST implications for cryptocurrencies such as bitcoin. This includes the Income Tax Department reviewing the activities of several bitcoin exchanges.
A number of exchanges have since applied from the Authority for Advance Rulings body for clarification of the indirect liabilities of their services, and if sales of bitcoin are liable to GST. This should determine if the trades are exempt, and if margin services are liable.
India introduced GST in July 2017 to replace VAT, CENVAT, Service Tax and many other conflicting indirect taxes
Currently, India does not recognise bitcoin as legal tender. This implies it is a physical asset, which would likely make price gains liable to 18% GST. However, if classified as a service, it would instead be liable to the 12% rate.
By contrast, most other countries have now classified digital currencies as private currencies, and therefore exempt from VAT or GST as a financial service.