India's legal system has always been flexible, and now, it is all set to accept the newest 21st-century mega industry into its folds. The Indian Finance Ministry is in talks to formulate a comprehensive GST plan, with the blooming and rapidly growing crypto industry at its center.
Since GST is only applied to services, it is yet to be figured out how goods and services taxes will be used for assets in the cryptocurrency industry, according to sources. However, the entire matter requires more time and research on a governmental level to reconcile better the understanding of the intersection of laws and nascent technology and how the crypto industry factors into the Indian legal system remains to be delved into.
Reportedly, talks around the GST rates and laws have been doing the rounds. The Indian government was previously considering either an 18% GST rate or a 28% GST rate on crypto assets.
However, more recent news around this has surfaced, which indicates that these numbers are being reconsidered. Sources now say that there is a high possibility that the GST rate to be imposed will be fixed at a number somewhere between this range.
It has also been revealed that the GST will likely be applied only on the margins or services instead of the entire Crypto asset.
A panel dedicated to the GST laws around crypto trade had reportedly convened in June to explore the legal options for incorporating crypto into the legal system.
As of now, certain Cryptocurrency related laws have already come into effect. 30% of any income from the crypto trade is currently taxed, and since the 1st of July, a 1% tax has been deducted at source.
Indian Finance Minister Nirmala Seetharaman has urged the International Monetary Fund to structure international cryptocurrency infrastructure actively.
To work according to the Financial Access Task Force (FATF), the Finance Ministry intends to come out with a final and comprehensive take on incorporating the crypto industry into the folds of the Indian legal system by the beginning of the coming year.