Amid the debate over the legitimacy of cryptocurrencies, post Budget continues, chairman of the Central Board of Indirect Taxes and Customs (CBIC), Mr Vivek Johri, has been asked about taxing the crypto ecosystem.
He said that more than one aspect of cryptocurrency intersects with the Goods and Services Tax (GST). The services provided by an exchange that deals with the sale or purchase of crypto are within the GST ambit.12
He explained that if the exchange servers are located in India, the exchange can pay GST for the services rendered. However, if the exchange servers are located outside India, the crypto buyer must pay the GST for the services received.
He also stated the other aspects of crypto which requires some examination, such as
- How to deal with the mining of crypto?
- Sale or purchase of crypto falls under the supply of goods or services?
- Treatment of crypto when used to make payment by way of barter for goods and services.
Mr Johri further said that CBIC is examining the other aspects. After that, there is a procedure to be followed: to take it to the law committee and then to the GST council to conclude how to tax the crypto ecosystem.
For any clarifications/feedback on the topic, don’t hesitate to get in touch with the writer at dvsr.anjaneyulu@cleartax.in
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.
