The government is considering a reverse charge on Indians investing in virtual digital assets on overseas platforms.
If a receiver who is based out of India and is not affected by the GST implication, the receiver who is based out of India will be liable to pay GST on reverse charge basis. A Finance Ministry official said that this could be seen in 4 B of GSTR-1 and is in the final stages of the discussion.
A reverse charge could be taxed at 18 per cent on commission earned through transactions on foreign exchanges, according to tax experts.
The centre is of the opinion that there is a lot of clarity in the law on the applicability of GST on virtual assets. The legality of virtual assets could be considered under Schedule 2 of the 2017 Central Goods and Services Act, which mentions activities or transactions to be treated as supply or supply of services, according to a source.
The centre is looking at aspects related to the rate and valuation on which cryptocurrencies will be taxed. The government is charging 18 per cent GST on financial intermediaries that deal with buying and selling cryptocurrencies. It is not yet clear how cryptocurrencies and services like mining will be taxed.
It is not likely to tax cryptocurrencies on the total value of transaction. The discussions are at a stage that needs further deliberations. We will look at the views of the fitment committee and the law committee before the matter is taken further. A govt official said something.
The government is yet to finalise a date to convene the 47th GST Council meeting. The council could meet in the last weekend of the month.