“There is no clarity of imposing GST on crypto,” says MP Sushil Modi in Rajya Sabha

According to a parliamentarian, virtual digital assets and cryptocurrency have been taxed at 30% in order “to discourage individuals from investing in cryptocurrency because it is very speculative and unpredictable.”

Sushil Modi, a BJP leader, highlighted the topic of cryptocurrencies at Rajya Sabha’s Zero Hour discussion on Tuesday. Notably, Finance Minister Nirmala Sitharaman said last week in her Budget address that transfers of digital assets, including crypto and non-fungible tokens (NFTs), will be taxed at 30%.

Modi stated on Tuesday that virtual digital assets and cryptocurrency have been taxed at the highest slab of tax of 30% without any exemption. He said that this was done to discourage individuals from investing in cryptocurrency since it is very speculative and volatile.

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The tax treatment is comparable to gambling, although there is no clarification on the imposition of GST. While the government levies 18% GST “only on the service provided by the crypto exchange and is treating it as financial services,” he claims that cryptos are similar to lottery, casinos, betting, gambling, and horse racing, which all have 28% GST and that is also on the entire value, on the entire transaction.

He stated that the GST is imposed on the whole transaction value for gold and that a transaction tax is also imposed on the whole transaction value for shares. As a result, he encouraged the government to “take initiative in the GST Council to impose a 28% GST on total value such as lottery, betting, gaming, or casinos.”

He stated that it is “not a skill-based instrument.” It is a purely arbitrary tool. Nobody knows who owns the cryptocurrency. There is no underlying value or inherent worth. It is neither a security nor a commodity; thus, it is not an asset, and if it is an asset, it should be handled like gold.”