India is going to equate cryptocurrencies to goods and impose 18% of GST

The Government of India intends to equate cryptocurrencies to the goods and impose trade on them with an 18-percent profit tax (GST). The Central Council of Taxation and Customs (CBIC) is considering the initiative in an expedited manner. According to Bloomberg sources, the decision will be made before June 1, 2018, which will avoid accumulation of excessive tax liabilities, which are difficult to pay off.

On taxation, digital assets will be equated to licensed software. Thus, the tax will be charged at the location of the buyer. Cryptocurrency transactions of residents outside India will be treated as import-export transactions and subject to an integrated tax.

Earlier, the government of India estimated the turnover of cryptocurrency traders at $ 30 million and sent them about 500 thousand tax notifications for a total of more than $ 5 million. However, due to the lack of a regulatory framework, the requirement to pay taxes was ignored. As a result, the Reserve Bank of India banned all licensed financial institutions from servicing any transactions with cryptocurrencies before making changes to the legislation since April 5.