This is a proposal that the government of India is considering.
It is intended to record with an 18% tax on profits from transactions with goods and services traded with crypto. They want to apply the so-called GST ("Goods and services tax"), he said. Times of India.
According to the Central Bureau of Economic Intelligence of the Indian Ministry of Finance, the volume of Bitcoin transactions in the country is USD 5.4 billion. From a tax collection point of view, such an amount could become USD 970 million for the Indian government's coffers just for crypto transactions.
Naturally, the rules cannot collect all the new assumptions of economic transactions in the figures established in the laws, so they must verify whether the nature of the new economic assumption matches the existing regulation to apply its effects, but always Care must be taken that this is not done by force or without a better understanding of the new economic assumption, as this only damages development. This is why the Central Office of Economic Intelligence is proposing to consider cryptocurrencies as “intangible assets” so that they can be considered within the scope of the GST.
In this regard, are cryptocurrencies intangible assets? Some considered that no, others that yes. But in September of last year, the balance apparently tipped yes. This is because the IFRIC International Financial Reporting Standards Interpretations Committee he pointed that did meet the definition of intangible assets insofar as: “are capable of being separated from the holder and sold or transferred individually and does not give the holder the right to receive a fixed or determinable number of currency units"
As for the application of this tax, as expected, the responses did not take long to arrive. Tanvi Ratna, CEO of Policy 4.0, Indian crypto policy advisory company he pointed"Unfortunately, this does not necessarily imply that cryptocurrencies are legal. Under Indian Law, illegal income is also taxed and avoiding their taxes is considered criminal activity"
On the other hand, The Supreme Court of India, revoked the prohibition imposed by the Central Bank of that country in April 2018 for banks to carry out transactions with cryptocurrency companies.
Finally, what was the view that the Indian government had on cryptocurrencies? Last year they were working on a bill that sought to ban the use of cryptocurrencies in India to give prominence to the digital rupee.
So, apparently its use will not obtain legality in Indian territory, but, on the other hand, it could be subject to tax.