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ARTICLE · 01 MARCH 2022

Cryptocurrency: Key GST Questions Post Budget 2022

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While the legality of cryptocurrency / assets in India remains under a shadow of doubt, the following developments in the recent past have once again put a spotlight on the GST implications vis a vis various transactions ...

IndiaTechnology
Sudipta Bhattacharjee
Sudipta Bhattacharjee
Onkar Sharma
Onkar Sharma
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1. Background

While the legality of cryptocurrency / assets in India remains under a shadow of doubt, the following developments in the recent past have once again put a spotlight on the Goods and Services Tax (GST) implications vis a vis various transactions in cryptocurrency / assets:

  1. Proposal in Finance Bill, 2022 to introduce a new scheme of taxation of 'virtual digital assets' (VDAs) to levy income tax and mandate tax withholding at source (TDS) on transfer of VDAs: VDAs have been defined in a wide manner to cover all varieties of cryptocurrencies, NFTs, etc.,
    1. income arising from transfer of VDA's taxable at 30 % (plus applicable surcharge and cess) with no deduction of expenses or set-off of any losses except for the costs incurred in acquiring the VDA's; and

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