The GST Council, the highest decision-making body on indirect taxes in India, during its next meeting is likely to consider levying a 28 per cent goods and services tax on cryptocurrencies, sources told CNBC-TV18. The government’s view is to keep cryptocurrencies at par with lotteries, casinos, racecourses, and betting, they said.
A GST Council-nominated law committee, whose view will be tabled before the GST Council for formal approval, will take up the proposal to levy 28 per cent GST on services and all activities related to cryptocurrencies soon, the sources said.
The proposal is likely to be tabled in next GST Council meet, whose date has not been finalised yet.
In the Union Budget 2022, Finance Minister Nirmala Sitharaman announced a 30 per cent tax on gains on cryptocurrencies and assets. No deduction will be allowed, except the cost of acquisition, and no loss in transaction will be allowed to set off the gains. A new Section 115BBH has been inserted in the Income Tax Act, 1961, to tax virtual digital assets.
Currently, legal position of cryptocurrencies, such as Bitcoin, is also not clear as there is no law in the country to regulate them. After the Union Budget tax proposal on the cryptocurrencies, investors said the provisions have effectively legalised crypto trading. However, Finance Minister Nirmala Sitharaman has said taxing cryptocurrencies does not mean it has been legalised. The matter is still being considered.
Meanwhile, even as the prices of key commodities in India are already facing upward pressures, the GST Council is now reported to have sought the views of states for increasing rates on 143 items. The products on which GST rates might be increased include handbags, perfumes/deodorants, chocolates, chewing gums, apparel & clothing accessories of leather, and walnuts, among others, according to a recent Indian Express report.
The GST Council in its meeting may also consider a proposal to do away with the five per cent slab by moving some goods of mass consumption to three per cent and the remaining to eight per cent categories, according to reports.
It also plans to raise the goods and services tax (GST) over the next two years and reduce the number of slabs, according to reports. This may help the government raise tax collections and reduce inflation which is already at a 17-month high of 6.95 per cent.
The GST collections in April hit an all-time high of Rs 1,67,540 crore on the back of better compliance and faster economic recovery. It is Rs 25,000 crore more than the previous highest collection of Rs 1,42,095 crore recorded in March.
“The gross GST revenue collected in the month of April 2022 is Rs 1,67,540 crore of which CGST is Rs 33,159 crore, SGST is Rs 41,793 crore, IGST is Rs 81,939 crore (including Rs 36,705 crore collected on import of goods) and cess is Rs 10,649 crore (including Rs 857 crore collected on import of goods),” an official statement said.
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