Despite the growing popularity of cryptocurrencies in India, legislators are split on how to create a robust regulatory framework.
According to a report by CNBC TV18, the Indian government intends to redistribute cryptocurrency trading as e-commerce platforms, lowering GP Goods and Services (users) pay per transaction, or per trade, to 1%.
The government of India currently levies an 18% GST on registered cryptocurrency transactions, which is passed on to users as trading currencies. The procedure is identical to that of the Indian brokerage tax.
The proposed GST plan, depending on the official exchange site, could result in increased tax liabilities for some customers. When conducting business with Indians, the government may insist that overseas cryptocurrency exchanges charge 18% of the same GST equivalent home to their consumers, according to Business Insider India. In India, foreign crypto exchanges are typically free from GST registration, resulting in a significant tax disparity between consumers of various trades.
The construction of a cryptocurrency regulatory framework in India continues to divide Indian lawmakers. The proposed legislation includes everything from categorizing cryptocurrency as assets to placing outright restrictions on their selling.
The Reserve Bank of India’s ban on banks doing business with cryptocurrency startups was overturned by the Supreme Court of India last year. Meanwhile, Prime Minister Narendra Modi has publicly announced his support for blockchain technology, but he has also fallen victim to a crypto Twitter scam.