Centre may levy 1% GST on crypto exchanges; introduce bill in winter session of parliament

Centre is planning to levy one percent GST on crypto exchanges at the source.

Media reports said cryptocurrency exchanges will possibly be classified into three categories – facilitators, brokerages, and trading platforms. While brokerages help connect buyers and sellers, trading platforms, which are mostly electronic, provide software for placing trades and monitoring the markets.

Other than the classification and taxation, the government is also looking to bring regulations around the advertisements by such crypto platforms. An Economic Times report said that the government may prohibit crypto exchanges and platforms from “active solicitation.”

In effect, this will likely mean a limit on the numerous ads that suggest people invest their money in cryptocurrencies, without warning them of the possible pitfalls.

The government is likely to present the cryptocurrency bill in the upcoming winter session of Parliament.

The government of India may soon allow their use as an asset class in the country. This means people in India may be able to buy or sell cryptocurrencies as shares, gold, or bonds.

 To ensure a safe trading space for such crypto investors, the government is also likely to roll out guidelines for crypto exchanges in the country, including a new taxation system.