Govt panel likely to consider sales tax on cryptocurrency next week: Report

Comprising of Central and State ministers, the government panel is mulling to broaden the tax net to track dealings in virtual digital assets in a more effective manner. As per the report, the panel is going to meet for two days in Chandigarh from 28 June.

Though the panel may not finalise a rate in the upcoming meeting, however, discussions may be held on placing it in the highest tax slab of 28 per cent.

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Earlier in 2022, Finance Minister Nirmala Sitharaman imposed a tax of 30 per cent on income from transfer of virtual assets and a 1 per cent tax at source on all crypto transactions in a bid to assess the size of crypto market in the country and track users. Through this move, the government was aiming at removing uncertainty about the legal status of crypto transactions.

However, there is still no clarity on imposition of a sales tax on digital currencies due to ambiguity in its treatment as goods or services and a lack of a regulatory framework.

On 30 May, Economic Affairs Secretary Ajay Seth had said that the government is almost ready with its consultation paper on crypto.

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“Our consultation paper is fairly ready. We have gone into a deep dive into this,” Seth told reporters on 30 May on the sidelines of an event.

But Reserve Bank of India (RBI) Governor Shaktikanta Das on 9 June reiterated his stance saying cryptocurrencies pose huge financial stability risks in the economy.

“We have already conveyed our stance (on cryptocurrencies) to the government. They pose huge risks to financial stability,” he had said. The apex regulatory bank had been cautioning investors regarding trading in cryptocurrencies amid the ongoing crypto market crash.

With inputs from agencies. 

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