The Officers Committee on GST has suggested to the GST Board to postpone a decision on the tax on cryptocurrencies and other virtual digital assets.
In its report to the GST Council, the Fitment Committee hinted that cryptocurrency regulation legislation was expected. Identifying all relevant supplies associated with the crypto-ecosystem would be essential, in addition to classifying whether they are goods or services.
The Central and State committee of officers, called the Assembly Committee, felt that further study was needed on the issues surrounding the crypto ecosystem.
It was decided that Haryana and Karnataka would study all aspects and submit a document to the adjustment committee in due course.
The committee felt that it was necessary to identify all relevant supplies associated with the crypto-ecosystem under the GST; their nature, whether these activities are goods or services and their applicable rate.
Therefore, he suggested that the Board defer a decision on cryptocurrency taxation to its next meeting on June 28-29.
Budget 2022-23 clarified the levy of income tax on crypto-assets; however, on the goods and services tax (GST) front, the classification of cryptocurrency as to whether it is goods or services is still unclear.
Since April 1, a 30% income tax plus tax and surcharges have been levied on such transactions in the same way as it treats winnings from horse racing or other speculative transactions.
A TDS of 1% on payments above Rs 10,000 to virtual currencies has also been introduced, which will come into effect from July 1.
The threshold limit for TDS would be Rs 50,000 per annum for specified persons which includes individuals/HUF who are required to have their accounts audited under the Information Technology Act.