Cryptocurrency Taxable under GST

Cryptocurrency Taxable under GST

Cryptocurrency Taxable under GST is still being determined. However, as per GST council meeting dated 14th may 2021, it is announced that trading of Cryptocurrency will be taxable under GST. The GST council has decided to impose 18% GST on the purchase or sale of Cryptocurrency.

TAXATION OF CRYPTOCURRENCY UNDER GST

Virtual digital asset means any form of information or code representing value exchanged and can be used in any financial transaction. The asset can be stored or transferred electronically.

Virtual digital assets also include non-fungible tokens and any other digital asset specified by the central government but not Indian or foreign currencies

The meaning and scope of supply under GST can be understood in terms of following parameters, which can be adopted to characterize a transaction as supply:

  • Supply of goods or services or both(Supply of anything other than goods or services does not attract GST).
  • Supply should be made for consideration.
  • Supply should be made in the course or furtherance of business.
  • Supply should be taxable supply.

Who must pay GST on supply crypto or digital assets and GST rate, HSN code?

  • Crypto or digital assets can be obtained through crypto exchanges or mining, i.e. self-generation. As per GST Law, the supplier of goods levies and collects GST.
  • Accordingly, the seller of crypto or digital assets needs to pay GST and collect from their buyer irrespective of the sale executed through exchanges or any other means.
  • Currently, there is no particular HSN Code and rate for digital assets; hence we may refer to HSN code 960899 named “other miscellaneous article”, stating a rate of 18% (highest among this category).
  • Further, only those persons will be liable to pay GST whose sales/turnover crosses the threshold limit of Rs 40 lakhs during the financial year or who have registered themselves under GST voluntarily.
  • We all have this question of whether Crypto Currency falls under the Definition of “Goods or Services”
  • Cryptocurrency falls within the meaning of ” Goods or Services” under the GST laws. This classification would further be important to understand the treatment of transactions in terms of provisions such as place of supply , time of supply , rate of tax, valuation,reverse charge, etc.

Input tax credit claims for GST on crypto or digital assets

Under GST Law, the Input tax credit can only be availed if the goods or services are used for business purposes.

GST levied on the purchase of crypto or digital assets or any other goods or services used for dealing in crypto, or digital assets can be used as an input tax credit. Other goods or services may include broker commission, consultancy services, software, the cost to generate digital assets, etc.

WHETHER CRYPTOCURRENCY IS SECURITIES

SECTION 2(h) of the Securities Contract Regulation Act ,1956

(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

(ia) derivative;

(ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes;

(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

(id) units or any other such instrument issued to the investors under any mutual fund scheme;

(ida) units or any other instrument issued by any pooled investment vehicle;

(ie) any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable including mortgage debt, as the case may be;

(ii) Government securities;

(iia) such other instruments as may be declared by the Central Government to be securities; and

(iii) rights or interests in securities;

Don't forget to share this article :-

Stay Updated With Our Blogs!

Explore more of our blogs to have better clarity and understanding
of the latest corporate & business updates.

Why People Choose Our Services ?

Free Legal Advice

We provide free of cost consultation and legal advice to our clients.

Tech Driven Platform

All our services are online no need you to travel from your place to get our services.

Grow your business

Experts Team

We are a team of more than 15+ professionals with 11 years of experience.

Transparent pricing

There are no hidden & extra charges* other than the quote/invoice we provide.

100 % Client Satisfaction

We aim that all our customers are fully satisfied with our services.

On-Time Delivery

We value your time and we promise all our services are delivered on time.

Why Trust legal Suvidha?

People Who loved our services and what they feel.

In this Journey of the past 10+ years, we had gained the trust of many startups, businesses, and professionals in India and stand with a 4.9/5 rating in google reviews.

Rajesh Srivastava
Rajesh Srivastava
Startup CEO
Read More
Great services and expertise. Highly recommended, Quick work and provided good support for the entire process. Made things very easier for us and I got my first ever Trademark for my product in just no time. I recommend their services to all the Startups for a hassle-free registration and other services. Again Thank You So Much Team Legal Suvidha... Good work...
Vijaya
Vijaya
Employee
Read More
Excellent service and has been very timely in response. They are very patient too and guided us with the right steps even though we approached them with very few days left before the deadline. I highly recommend them to other startups who need legal advice and do all the paperwork at the year-end. And we would approach them for all our future requirements as well.
Krish Mundarath
Krish Mundarath
Businessman
Read More
We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. I will surely consider them for future work.
Inamul Hashmi
Inamul Hashmi
Businessman
Read More
Legal Suvidha filed my GST, Income Tax Returns for my business Happy by their service. They are Excellent, cost effective, efficient, co-operative & Genuine service providers keep up the good work in the future. Thank you for shaping my business in the right direction. I would suggest others to take up their services they are better than other competitions present in the market.
Previous
Next

Our Partnerships & Collaborations

Contact us and grow your business

Legal Suvidha App

Now all Professional Services in a Single Click !

Now get all the services required for your business in a single app.

Subscribe to our newsletter & grow your business

Subscribe To Our Newsletter .

Sign up to receive email updates on new product announcements, special promotions, sales & more.