India to levy 18% GST on bitcoin Jul 2018
- May 22, 2018 | Richard Asquith
India’s Central Board of Indirect Taxes and Customs is considering a proposal to make digital currency trading subject to Goods and Services Tax at 18%. The new liability may fall due from 1 July 2018.
In this case, India would be classifying cryptocurrencies, such as bitcoin, as a physical asset rather than as a currency for the exchange of goods and services. This would therefore mean any sales would be considered a taxable supply for indirect tax. The place of supply would be considered the Seller's location.
The rational is that the tax authorities are anxious to prevent virtual currencies being used by criminal gangs to launder money. The Indian Central Bank has already refused to extend official regulation to digital currencies.
Contradictions on global VAT and GST on bitcoin
The EU 28 countries have agreed to exempt digital currencies from VAT - classifying them as a private currency / financial service. Japan, South Africa, Thailand and others have followed suit. Some countries however, including South Korea, have imposed their local consumption tax on trading.