Don’t tax on cryptocurrencies, says committee

The officers' committee on GST has suggested that the GST Council do not make a decision on the coin and other virtual assets tax.

In its report to the GST Council, the Fitment Committee suggested that a law on cryptocurrencies regulation is a long way off the table. Identifying all relevant products and services associated with the coin would be essential, as well as determining whether or not they are goods or services.

A deeper study needed to be done on the issues involved in the coin ecosystem, according to the committee of officers from the Centre and states.

It was decided that Haryana and Karnataka will study all aspects and submit a paper to the Fitment Committee in due course.

The committee felt that it had to identify all relevant supplies associated with the cripto-ecosystem under the ambit of GST and their nature, whether those activities are goods or services and their applicable rate.

It suggested that the Council doesn't make a decision on the taxation of cryptocurrencies in its next meeting on June 28 -- 29.

The 2022 -- 23 Budget clarified the income tax on assets, but on the Goods and Services Tax front, the classification of cryptocurrencies is still not clear as to whether it is goods or services.

A 30 per cent income tax plus cess and surcharges are levied on such transactions from horse races or other speculative transactions from April 1 onwards.

A 1 per cent TDS on payments over 10,000 in virtual currency has also been introduced, which will kick in from July 1.

The threshold for TDS would be Rs 50,000 a year for specified persons, which include individuals HUFs who are required to have their accounts audited under the I-T Act.