Seven bitcoin exchanges in the nation including Unocoin, Zebpay and CoinSecure are seeking clarity over how their businesses might be classified under GST rules, and are planning to approach the Authority for Advance Rulings (AAR) – the government body that decides on the applicability of tax rates – over the matter, the Economic Times (ET) states.
The official stated:
Under the GST rules, if bitcoin is considered to be a currency, there would not be any taxes applicable, ET states. However, if it is recognized instead as a good, GST at 18 percent could be applicable, or, in the case of it being deemed a service, 12 percent.
Abhishek A Rastogi, a partner at law firm Khaitan & Co, told ET that there is ambiguity for bitcoin exchanges over whether GST is applicable on total revenue or merely on margins earned. He continued to say, “the tax authority must give clarity on whether bitcoin exchanges are selling goods and services, or are mere trading platforms that earn margins.”
The move comes a month after the Indian tax department visited bitcoin exchanges across the country seeking to identify users. The operation was carried out over suspicions of tax evasion by some exchange customers.
Indian rupees image via Shutterstock
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