- The Indian government is weighing a proposal to impose 18% GST on bitcoin trading.
- The Central Economic Intelligence Bureau (CEIB) recently made the proposal to the Central Board of Indirect Taxes and Customs (CBIC) on levying GST on Bitcoin.
- The CEIB said levying GST on bitcoin trading could potentially generate revenue of Rs 7,200 crore annually.
With the increase in Bitcoin demand, The Indian government is weighing a proposal to impose 18% GST (Goods & Service Tax) on Bitcoin trading, considering the potential to generate over Rs 7,200 crore revenue annually.
The Central Economic Intelligence Bureau (CEIB), an arm of the union finance ministry has made the proposal to the Central Board of Indirect Taxes and Customs (CBIC) on levying GST on Bitcoin.
The Central Board of Indirect Taxes and Customs (CBIC) is the nodal agency responsible for administering Customs, GST, Central Excise, Service Tax & Narcotics in India.
The CEIB, which acts as the finance ministry’s think tank, recently conducted a study on imposing GST on cryptocurrency trading. It has pegged the value of
According to the TOI report, The CEIB has suggested finance ministry that Bitcoin can be categorized under the ‘intangible assets’ class, and GST could be imposed on all the transactions.
This is not the first time that the government is looking to impose GST on crypto trading. In May 2018, Bloomberg reported that the government was mulling to levy 18% GST on cryptocurrency transactions.
Bitcoin is considered one of the world’s most valuable cryptocurrencies, gained over a 200% increase in 2020. On December 28, Bitcoin crossed an all-time high of $28,000 (amounted to Rs 20 lakh).
In March 2020, The Supreme Court quashed a 2018 circular by the Reserve Bank of India (RBI), which barred banks and financial institutions banning from providing services related to cryptocurrencies tradings.
Since then the Bitcoin trading volumes in India have grown immensely, according to the reports, The average daily cryptocurrency trading volumes across the top Indian exchanges has grown by nearly 500%.
Further, The average daily traded volume across the top four Indian cryptocurrency exchange platforms stood at over $22.4 million as of December 16, 2020, compared to a little under $4.5 million as of March 1, 2020.
More so, according to the reports by Paxful, India is the second-largest Bitcoin market in Asia, after China, and the sixth-largest in the world, after the United States.
From January 1 to November 14, 2020, around $74.92 million Bitcoins were traded on Paxful by Indian investors, which is 347% higher than the previous year, the report added.
WazirX, ZebPay, CoinDCX, CoinSwitch, Uncoin, and BitBNS are popular Indian crypto exchange platforms.