The impasse on GST levy for cryptocurrency and virtual digital assets continues as tax authorities are likely to seek more time to come up with the right proposal regarding the appropriate tax treatment for the sector, sources told CNBC-TV18.
In the last GST Council meeting held in October, the task was handed over to the Tax Research Unit under CBIC, and the council had asked them to prepare a report.
However, sources indicate that “this report is yet to be finalised, as deliberations are still underway, and the tax research unit is currently examining whether to treat cryptocurrency/virtual digital assets as financial instruments, goods, or services.”
This is the second time that tax authorities are finding it difficult to finalise a proposal for the GST Council.
Currently, the industry is paying an 18% GST on the platform fee for providing the service to customers to transact, and no GST is charged on the value of the cryptocurrency/virtual digital asset/tokens.
The council had asked tax officers to assess whether cryptocurrency or virtual digital assets are actionable claims and should attract 28% GST, in addition to 18% GST on transaction fees.
In the previous instance, a panel of Karnataka and Haryana state officers was set up and tasked to come up with a proposal at the June 2022 Chandigarh GST Council.
However, after more than a year of being set up, in the October GST meeting, the council was informed by the panel of Karnataka and Haryana state GST officers about the inability to submit a report.
Meanwhile, watching this space closely, experts feel that a well-balanced clarity with specific scenarios should be the government's effort while putting in place a proper policy for the sector.
Source: CNBC TV 18
https://www.cnbctv18.com/finance/goods-and-service-tax-gst-levy-cryptocurrency-virtual-digital-assets-18560591.htm
