GST on crypto: The government will levy Goods and Services Tax (GST) on the service fee charged on cryptocurrency transactions. According to a report in Livemint, two officials of the Finance Ministry have given this information. However, the Finance Ministry is yet to decide how indirect tax is to be levied on certain crypto transactions covered under actionable claims.
Giving free tokens or no GST on products
GST is levied on those goods or services which are offered at a cost. However, some transactions such as giving a company free tokens to incentivize its employees or incentivizing its products, etc. do not fit this description of supply and can be classified as an actionable claim, which is under the purview of GST. remain outside. An official said, the government may approach the GST Council for clarification on the issue.
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Government has to make policy in case of ‘actionable claims’
“GST on crypto-assets is applicable only on the margin or service fee charged by the exchange and not on the full value,” said one of the two officials. But the government has to formulate a policy on the use of GST in case of ‘actionable claims’.
In some cases the picture is not clear
The second official said, “In case of select transactions, such as activities involving the mining of cryptocurrencies or exchange of crypto assets between two persons, we are looking into whether these involve a transaction in the supply of goods and services or Is this merely an actionable claim which is neither a goods nor a service under the GST law. He said that if it is classified as Goods or Services then GST will be applicable.
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GST Council will have to clear the picture
“One of the considerations is that, since it is an actionable claim, there is neither a goods nor a service. This part is not very clear. We will decide our stand in this regard going forward.”
At present, there is little clarity on crypto tax after the proposal of 30 per cent tax on income from virtual assets in the general budget on Tuesday. Now on the indirect tax front, the GST Council will have to clarify the situation.
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