The upcoming GST Council meet on June 28 and 29 in Chandigarh is likely to have a packed agenda, according to sources, the council is likely to give a breather to the crypto industry.
Sources have told CNBCTV18 that the GST Council nominated Fitment Committee “has suggested to defer the proposal till government finalises a view on the legality and in the meantime has suggested that clarity needs to emerge on GST applicability on crypto exchanges and activities such as mining, barter, wallets which can be done only post a deeper study.
"For this, the committee has suggested that council may ask states of Haryana and Karnataka to submit a paper on GST on crypto services/activities,” they added.
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The Fitment committee is understood to have opined that “Crypto assets refer to algorithm based on decentralized convertible virtual asset protected by cryptography. In such a case various activities get involved."
"The Government and Finance Ministry has introduced to tax virtual digital assets under income tax Act but RBI had issued a circular of 2018 prohibited banks and financial institutions from dealing in, and providing services for facilitating dealing in virtual currencies, though Supreme court had struck it down,” they added.
“Also important is a fact that Finance Ministry is also working to get a Bill on virtual digital assets and own digital currency, which is yet to come out. Therefore, it is important to identify all relevant supplies associated with crypto-ecosystem which are under the ambit of GST, thus fitment committee wants that the GST applicability needs to be studied properly before announcing any tax in haste,” sources, who did not wish to be quoted said.
Given such circumstances, it is better that government comes with a proper study, takes all aspects in consideration before coming up with any GST taxation liability announcement, sources added.
In what could be a breather for the industry, crypto exchanges etc, the fitment committee has suggested that the council may like to have a proper study in place, which can give the industry and other stakeholders a chance to voice their concerns and suggestions.
“Fitment Committee discussed in detail various activities associated with crypto currencies and NFT and taxability thereof. It was felt that the issues involved in crypto ecosystem need deeper study. It was decided that Haryana and Karnataka
shall study all aspects and submit a paper before the Fitment Committee in due course,” sources added.
However, it is for the GST Council to take a final call, as it is scheduled to meet to discuss the nuances and suggestions made by the fitment committee next week in Chandigarh.
(Edited by : Anand Singha)
First Published: Jun 23, 2022 6:05 PM IST
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