28% crypto sales tax? Talks next week

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Indian Panel to Consider Cryptocurrency Sales Tax Next Week

An Indian ministerial panel will meet next week to discuss a goods and services tax on cryptocurrency transactions, people familiar with the matter have said.

The panel, made up of federal and state finance ministers, seeks to expand the tax net to track transactions in virtual digital assets more effectively, the people said, declining to be identified citing rules on communication with the media.

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The panel is meeting for two days starting June 28 in the northern Indian state of Chandigarh.

The panel is unlikely to finalize a rate at the next meeting, but talks could take place to put him in the top tax bracket of 28%, the people said.

A finance ministry spokesperson did not immediately respond to calls seeking comment.

Earlier this year, Finance Minister Nirmala Sitharaman imposed a 30% levy on virtual asset transfer income and a 1% withholding tax on all crypto transactions in a bid to assess the size of the crypto market in the country and track users.

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The move was seen as removing uncertainty about the legal status of crypto transactions.

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

The federal government is already working on legislation to regulate or strengthen the provisions, though it is only expected after a global consensus emerges on regulating these assets, Bloomberg previously reported.

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Digital currencies have been under pressure throughout the year, along with other risky assets, as global central banks have begun raising interest rates to curb soaring inflation.

Bitcoin is down around 50% this year and Ether is down 70%.

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