One rupee for you, 19 for me: India mulls crypto sales tax
08:29, 11 May 2022
Indian authorities have unleashed their latest salvo on the country’s crypto users with the suggestion that a 28% general sales tax (GST) be imposed on all crypto transactions, just weeks after a 30% income tax rule was brought in.
According to local media, India crypto volumes dropped over 50% following the 1 April introduction of a tax on cryptos and further still with a subsequent ban on India’s biggest payment provider UPI working with digital exchanges selling tokens such as ETH and BTC.
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In a move that could have sparked George Harrsion to pen a song, India’s Goods and Service Tax (GST) Council is now looking to levy a 28% tax on all crypto transactions.
If implemented, the GST move would treat digital assets as equal to gambling, by applying the same tax treatment as lotteries, casinos and racecourses in India, an analogy that was recently made by an Indian MP.
India’s authorities’ shadow ban on domestic crypto exchanges by cutting their access to UPI (Unified Payments Interface – essentially a dometic Indian version of SWIFT) saw US exchange Coinbase end plans for an Indian service, three days ahead of launch.
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UPI handles roughly 40% of transactions across India and National Payments Corporation of India’s 7 April statement that it is ‘not aware of any crypto exchange using UPI,’ effectively ended mainstream access to domestic crypto exchanges.
Indian digital exchange WazirX’s co-founders Nischal Shetty and Siddharth Menon have reportedly relocated to Dubai while other users are trading via offshore accounts.
Speaking on an earnings call yesterday, the Coinbase CEO Brian Amrstrong said that following interactions with the Reserve Bank of India (RBI), India’s central bank, the digital asset exchange severed its UPI link, and its plans to trade digital currencies.
“So a few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India, which is kind of the Treasury equivalent there,” the CEO said.
NASDAQ listed Coinbase saw revenue of $1.2bn for the first quarter of 2022, which led to net loss of $430m, compared with a profit of $840m in the fourth quarter.
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