Cryptocurrency Exchanges in India Demands Clarification on Taxation from Central Bank
CBW -External Analyst
Sep, 29 2020
Indian Cryptocurrency exchanges have asked India’s Central Bank – Reserve Bank of India (RBI) for clarification on the domestic crypto- tax regulations. After the historical decision of the Supreme Court of India lifting the ban on the crypto industry and legalizing the crypto transactions, an ambiguity is still lingering about the crypto taxation.
As per the recent development, the crypto exchanges have written a letter to the RBI seeking clarity on their status. The letter states that the money lenders are denying the banking services to the crypto industry due to a lack of clear guidelines for taxation from the RBI.
The exchanges are asking for the categorization of crypto assets for the convenience of tax payments. The clarification on whether the crypto assets will be classified under commodity, goods, currency, or services will make a significant difference as they will be treated accordingly under the newly introduced tax structure - Goods and Service Tax (GST).
PraveenKumar VijayKumar, Chairman and CEO of crypto exchange Belfrics Global commented:
“If the digital assets are not exempted from GST, the digital currency exchanges of India are going to have a standoff with the Tax authority.”
He further added, “In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this as if we pay GST on the whole transaction, then most platforms would not be able to survive.”Sidharth Sogani, CEO of digital asset research firm Credbaco Global commented, “The RBI was supposed to issue a new circular directing the banks to start banking relationships again with the cryptocurrency exchanges and businesses after the Supreme Court’s ban overturned the Central Bank’s ban.”
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