The tax authorities in India are looking to charge a 28% goods and services tax (GST) on crypto transactions. It should be noted that this tax is separate from another 30% tax on crypto profits that was already instituted on April 1, 2022.
It’s no secret that crypto gives its investors handsome profits. However, governments all over the world would like to get a piece of these profits. They achieve this by imposing heavy taxes upon crypto investors.
Heaps and Heaps of Taxes
According to reports, the goods and services tax (GST) Council created a committee that would soon impose a 28% tax on all services and activities related to crypto. On top of the 28% GST, crypto investors in India are already facing a 30% tax on any crypto income. In addition to that, a 1% tax deducted at source (TDS) will begin to be imposed on July 1, 2022.
Crypto activities that will incur taxes include sales and purchase of crypto tokens on exchanges, holding tokens in crypto wallets, and also staking cryptocurrencies. The GST Council will examine any and all activities concerned with crypto before arriving at a decision.
Experts Take on the Hefty Taxes
The news created havoc in the crypto community which is already feeling the heat of the drastic price crashes in the crypto markets. Frustrated industry enthusiasts, including traders and investors, argue that crypto is an asset class with different use cases across industries. They also argue that crypto is not a gambling or luxury industry and hence, does not deserve such hefty taxes.
The Director of Public Policy at WazirX, an Indian-based crypto exchange said that “the industry is open to dialogue with the larger GST Council on such matters.” Further on that note, Vikram Subburaj, the CEO of Giottus Crypto Exchange is pleading with the government to provide more clarity on the 28% GST. He argues that “the 28% GST on investment assets will push a lot of people into non-compliance.”
Blockchain is a rapidly emerging technology and has the potential to shape the future of the Internet and finance. By imposing such unrealistic taxes, India is limiting its own future economic growth. A forceful approach by the Indian government to kill crypto might lead to the death of a potential trillion-dollar opportunity.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.