{"id":2494,"date":"2022-04-17T07:43:14","date_gmt":"2022-04-17T07:43:14","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=2494"},"modified":"2022-04-21T09:55:50","modified_gmt":"2022-04-21T09:55:50","slug":"cryptic-future-of-cryptos-under-gst","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/cryptic-future-of-cryptos-under-gst\/","title":{"rendered":"Cryptic future of Cryptos Under GST"},"content":{"rendered":"

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Money as a medium of exchange helps us in acquiring different necessities to live a comfortable life. In a historical era, people used the barter system for purchasing things that they required but because of its inherent limitation of having people\u2019s requirements coincide with each other to fructify the transaction, there comes the era of coins and paper currencies which are tangible and have wide acceptance as a medium of exchange for completion of the transactions. However, with changing times and emerging technologies there is a shift towards digital currencies.<\/p>\n

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As the wheel of time is spinning, coins and paper currencies have started depreciating in terms of their value because digital currencies are taking a big leap. The reason for such knocking down of coins and paper currencies is that they are bulky, prone to tearing, and difficult to carry. On the other hand, digital currencies are secured through encryption and are a hedge against inflation.<\/p>\n

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Cryptocurrency also known as crypto, is a digital virtual currency designed to make transactions over the internet. It is a peer-to-peer system that can enable anyone to send and receive payments. It does not have any central issuing or backing of any regulating authority, instead, it uses blockchain technology to settle transactions securely.<\/p>\n

Currently, in India, it is neither legal nor illegal. It is not legal because both the government and the central bank, the Reserve Bank of India (RBI), have not given any recognition to cryptocurrencies yet. Also, it is not illegal as it is an asset class and investors invest over different cryptocurrency exchanges.<\/p>\n

The Government of India is working on the legislation related to cryptocurrencies, as the finance minister, Nirmala Sitharaman has recently stated that a new crypto bill is going to be passed which is expected to regulate the crypto markets in India and permit crypto investors and traders with reasonable restrictions. So, investors before investing in cryptocurrencies must be aware of the upcoming levy of taxes on them.<\/p>\n

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From the\u00a0GST<\/strong><\/a>\u00a0perspective<\/strong>,<\/p>\n

The government of India is working to bring cryptocurrencies under the ambit of GST law to tax the entire value of transactions. Firstly, there is a need to provide clarity on the classification<\/strong> of it and whether it will fall under the definition of goods or services, and then the rate<\/strong> is to be decided.<\/p>\n

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It means every kind of movable property other than money and securities but includes actionable claims<\/u>, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.<\/p>\n

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It covers operations connected to the usage of money or its conversion by cash or any other way from one form, currency, or denomination to another form, currency, or denomination for which additional consideration is charged, in addition to products, money, and securities.<\/p>\n

Observations on classification:<\/strong><\/p>\n