22 January 2022
Indiatech, an Indian industry association, has written a letter to the country’s finance minister Nirmala Sitharaman about Cryptocurrency taxation. The association consists of major Indian Crypto exchanges such as Coindcx, Coinswitch Kuber, and Wazirx.
The letter asked for clarity on Crypto taxation from the finance minister in Union Budget 2022-23. They also asked the government to make improvements in the existing tax laws to include Crypto assets. President and CEO of Indiatech’s Rameesh Kailasam said
“The budget should ideally offer coherent rules on direct taxation and the GST Council should detail the applicability of taxation, else there will be confusion.”
Recently, some of India’s Crypto exchanges have been accused of evading goods and services tax (GST). India’s Directorate General of Goods and Services Tax Intelligence (DGGI) is inspecting many Crypto firms for tax evasion.
A raid was conducted by DGGI on major Crypto exchanges and detected “massive” GST evasion. This crackdown disclosed tax evasion worth about Rs 70 crore ($9.4 million). In response, the Crypto firms blamed the confusion over tax laws as the reason behind the failure to pay taxes properly.
The association has requested Nirmala Sitharaman to categorise Cryptocurrencies as digital assets instead of currencies. Indiatech also suggested levying a flat 18% GST only on exchanges’ commissions.
Currently, India has no clear laws on governing Crypto assets. During the winter session of parliament, a Crypto bill was listed, but it was not taken up, and now the Indian government claims that they are reworking the bill.