September 28, 2022

Crypto Investors Face Severe Challenges As GST Panel Sets To Enact 28% Tax Law

News sources showed that the crypto technology is not within the grasp of GST, and also the council classifies cryptos separately into another category as it sees cryptos as means of foreign transactions.

In India, every good and service imported into the country for the citizens to consume attracts a levy of 18% tax. However, the regulators of the India GST group have decided to form a distinct bill that would require every crypto investor to pay a tax of 28% on every crypto-related service they carried out. 

GST Panel Formed A 28% GST Bill on Cryptos

Not long ago, the Indian regulator had initially enacted a tax law that required the remittance of 30% of the profit made in every crypto transaction. However, recent news reported the GST panel seems not to be cleared on its cut in the tax on cryptos. Hence, the issue was deliberated upon and the majority of the panel voted for a tax of 28% to be deducted from every crypto transaction or service executed by any citizen of the country. 

The news also reported that the GST law panel had scheduled another meeting where the regulators would be deliberating on which category they would place other technical services that have to do with digital currencies. 

The actions the regulators of India have taken on crypto since the beginning of this year have placed the crypto market in the country under a lot of pressure. The initial 30% tax deduction and 1% TDS were met with dissatisfaction from a lot of Indian crypto investors. However, enacting the proposed 28% GTS tax might be the last straw that will end the crypto market in the country. 

This May Be A Crypto Ban In Disguise

Statistics showed that the Indian crypto market volume is on a downtrend due to all the ridiculous tax and interest rates the regulators are levying on crypto transactions coupled with the rapidly liquidating future tradings. Nonetheless, if the GST panel eventually enacts their proposed 28% tax cut, then it is certain that the crypto volume will massively dive the country. 

Ajeet Khurana, the CEO at Reflexical Pte firm, said that on the one hand, if the proposed levy by the Indian GST panel is on crypto services alone, it would be an ominous sign for crypto investors in the country. But on the other hand, if the levy is on the complete transaction, then that could shut down the entire Indian crypto industry.

If the tax law is eventually passed, it will force a lot of already distraught crypto traders who are Indian citizens to stop investing in crypto, thereby creating the same effect as banning crypto in the country.