The GST Council, the highest decision-making body on indirect taxes in India, is likely to consider levying a 28 percent goods and services tax on cryptocurrencies at its next meeting, sources told CNBC-TV18. The government’s stance is to keep cryptocurrencies on par with lotteries, casinos, racecourses and betting, they said.
A GST Council-nominated law committee, whose position will be presented to the GST Council for formal approval, will soon consider the proposal to levy 28 percent GST on services and all activities related to cryptocurrencies, the sources said.
The proposal is likely to be submitted at the next GST council meeting, the date of which has not yet been set.
In the 2022 Union Budget, Finance Minister Nirmala Sitharaman announced a 30 percent tax on profits on cryptocurrencies and assets. No deductions will be allowed except for the acquisition cost, and no transaction loss will be allowed to offset the gains. A new section 115BBH has been inserted into the Income Tax Act, 1961, to tax virtual digital assets.
Currently, the legal position of cryptocurrencies, such as Bitcoin, is also not clear as there is no law in the country to regulate them. Following the Union budget’s tax proposal on the cryptocurrencies, investors said the provisions effectively legalized crypto trading. However, Finance Minister Nirmala Sitharaman has said that taxing cryptocurrencies does not mean that it has been legalized. The matter is still under consideration.
Meanwhile, even as prices of key commodities in India are already under upward pressure, the GST Council is now said to have asked states’ views on raising tariffs on 143 items. The products on which GST rates may be increased include handbags, perfumes/deodorants, chocolates, chewing gum, leather and walnut clothing and accessories, according to a recent Indian Express report.
The GST council could also consider a proposal at its meeting to abolish the five percent plate by moving some goods from mass consumption to three percent and the rest to eight percent categories, according to reports.
It also plans to increase the goods and services tax (GST) over the next two years and reduce the number of plates, according to reports. This could help the government increase tax collection and reduce inflation, which is already at a 17-month high of 6.95 percent.
GST collections in April hit a record high of Rs 1,67,540 crore on the back of better compliance and faster economic recovery. It is Rs 25,000 crore more than the previous highest collection of Rs 1,42,095 crore which was registered in March.
“The gross GST revenue collected in the month of April 2022 is Rs 1,67,540 crore of which CGST is Rs 33,159 crore, SGST is Rs 41,793 crore, IGST is Rs 81,939 crore (including Rs 36,705 crore collected on importation of goods) and cess is Rs 10,649 crore (including Rs 857 crore collected on imports of goods), an official statement said.
Read all the latest news, breaking news and IPL 2022 Live Updates here.
