The centre is mulling over a proposal to impose 18% GST on bitcoin trades, which are estimated to be close to Rs. 40,000 crore on an annual basis.
For this, the finance ministry's arm the Central Economic Intelligence Bureau (CEIB) has put forth the proposal before the Central Board of Indirect Taxes & Customs (CBIC) and said the move could potentially garner as much as Rs. 7200 crore for the government annually from bitcoin transactions carried out in the country. The CEIB, which is a think-tank of the ministry, carried out a study on levying GST on cryptocurrencies.
CEIB as per the finance ministry sources has suggested that bitcoins could be categorized as intangible asset and GST could be levied on all transactions. The board on the other hand suggests that the cryptocurrency could be taken as current assets and
GST levied on the margins made in its trading.
In the current regime, there is no regulator for cryptocurrency trading and there remains a threat of it being employed for money laundering activities and undermining of legal currencies.