Foreign crypto exchanges in India may have to pay 18% GST as the government mulls over taxation
With the Indian government mulling over new laws to regulate cryptocurrencies in the country, the indirect tax department is looking into whether overseas exchanges need to pay the Goods and Service Tax (GST) at 18%.
The 18% slab is meant for capital goods and industrial intermediaries, among other times, while the highest slab of 28% applies to luxury goods, like automobiles. It’s the same as the tax on brokerage with trading in conventional shares on the stock market.
Indian cryptocurrency already charges their users GST. The tax is built into the trading fee that exchanges add to the buying price of Bitcoin, Ethereum, and more. The exchanges pay GST to the government as part of their general tax payments.
It’s also unclear whether the 18% GST slab will be applicable to all transactions or only on the margins. Right now, the 18% GST charged by conventional brokerages is only on the margins or the commission taken by the company — not the entire transaction.
