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Crypto transactions involving Indian, foreign exchanges may attract GST
March 29, 2022
Transactions involving Indian exchanges and those outside India, particularly involving procurement of crypto resources that are traded in India, could go under the taxman’s lens.
The tax department is scrutinizing how trades that permit exchanging India deal with their cryptocurrency float, and whether there is any component or any transactions where Goods and Services Tax (GST) could apply, individuals aware of the development said.
At present, a few trades work in India yet just a handful fundamentally the huge ones will quite often have actual cryptocurrencies on their books to be traded by Indian dealers and investors. A portion of the huge trades additionally has to hold entities outside India that basically hold a large chunk of crypto assets.
These are then “transferred” to the Indian entity before any Indian could get it. A few different trades will quite often match transactions among buyer and seller. By and large, either the purchaser or the dealer is likewise based external India however the trade happens through the exchange.
At times there are also transactions between two exchanges that are recorded as “transfer,” say insiders.
The tax department is scrutinizing whether these transactions involving exchanges could likewise attract GST.
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