New Delhi: Government is contemplating to levy income-tax (I-T) and goods and services tax (GST) at the rate of 18 percent on gains and trading of bitcoins or related cryptocurrencies, a report in the Business Standard has said.
Ahead of the presentation of Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the Budget session of Parliament, as has been reported by several media publications, the report further added that both the taxes will be levied for the current fiscal year.
Last year, a report in the Times of India, quoting officials said that the Central Economic Intelligence Bureau (CEIB), an arm of the finance ministry had suggested that bitcoins can be categorised under ‘intangible assets’ class, thus making it liable for GST levy.
Meanwhile, the Ministry of Finance had issued statement on February 9 on Virtual ‘Currencies’ stating that they are like Ponzi Schemes.
The Finance Ministry in its statement said that VCs are not backed by Government fiat. These are also not legal tender. Hence, VCs are not currencies. These are also being described as ‘Coins’. There is however no physical attribute to these coins. Therefore, Virtual ‘Currencies’ (VCs) are neither currencies nor coins. The Government or Reserve Bank of India has not authorised any VCs as a medium of exchange. Further, the Government or any other regulator in India has not given license to any agency for working as exchange or any other kind of intermediary for any VC. Persons dealing in them must consider these facts and beware of the risks involved in dealing in VCs.