The GST council, meeting next week, is likely to discuss the goods and services tax (GST) on cryptocurrency transactions during the meeting. The panel may not set a final rate at its upcoming meeting, but discussions could be held about placing the rate in the highest tax bracket of 28 percent, according to a media report.
The Council is seeking to broaden the tax grid to track transactions in virtual digital assets more effectively, the Bloomberg report said, adding that a Treasury Department spokesman did not immediately respond to calls for comment.
The 47th GST Council meeting will be held on June 28-29 (Tuesday and Wednesday) in Chandigarh.
Finance Minister Nirmala Sitharaman announced in the Union Budget 2022 that the government will impose a hefty tax at a flat rate of 30 percent on virtual assets, including cryptocurrency and non-replaceable tokens or NFTs. The budget also introduced the provision of tax withheld at source at 1 percent levied on payments made in the transfer of virtual assets.
At the 47th meeting, the GST council, led by Finance Minister Nirmala Sitharaman, is also likely to discuss pruning the list of exempt items, the plan to shift tariff plates and a proposal to correct the reverse tax structure in textiles. It could discuss a proposal to shift tariff plates from the current five percent to seven or eight percent; and from 18 percent to 20 percent. The Council may also discuss the proposal to correct the reverse duty structure in textiles.
The Council-appointed Ministerial Group (GOM), headed by the Chief Minister of Karnataka, Basavaraj Bommai, has already held its meeting to discuss these issues. According to a PTI report, the GoM was unable to reach a consensus. However, the report states that the Group of Ministers will present a status report to the GST council on the consensus reached at the previous meeting of the GoM on 20 November 2021. The panel, which was established last September, last meeting in Nov 2021.
Currently there are four GST plates: 5 percent, 12 percent, 18 percent and 28 percent. The 18 percent plate has 480 items, about 70 percent of which come from the GST collections. In addition, there is an exempt list of items such as unbranded and unpackaged food that are not subject to the levy.
GST Collections reached Rs 1,40,885 crore in May, up 44 percent year on year. However, it was a 16 percent drop compared to April’s GST collections. The gross GST revenue collected in May 2022 was Rs 1,40,885 crore, of which CGST is Rs 25,036 crore, SGST is Rs 32,001 crore, IGST is Rs 73,345 crore (including Rs 37,469 crore collected on imports of goods) and cess is Rs 10,502 crore (including Rs 931 crore collected on imports of goods).
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