Crypto exchanges might fall under the GST of the country
One of the local media of India, Business Standard, reported that the government of the country may regulate the cryptocurrency industry. It is expected that the Indian government may label crypto exchanges as e-commerce platforms.
This expected regulation will put Indian crypto exchanges under the GST regime, goods and services tax, which will prompt them to take 1% tax collected at the source. But, the taxes collected can be deducted later based on the tax liability of the investors.
If the rules are finalized, all crypto exchanges operating in India will have to register themselves with the Indian GST regime.
Also, the report shows that it is highly likely that the crypto exchanges will be classified into three categories by the government. These categories are the ones that act as facilitators, the brokerages that enable buying and selling, and trading platforms that assure an interface for trading.
It is also expected that the government may consider the use of blockchain techs as an export which sets down the taxes on crypto start-ups.
Regulation Need
There is a high crypto penetration in India among the citizens, which causes the spawning of many crypto exchanges. However, the details of the regulation are still not clear.
The government is planning to conduct a high-level meeting about crypto on its agenda at a recent time. Although it is thought that the government was going to ban crypto circulation by the last draft bill, the recent developments are seen as lenient.
Moreover, with the rising trend in cryptocurrency, local exchanges begin to run ad campaigns in all media streams. However, with the expected government regulations that may restrict some crypto campaigns or promotions, several important exchanges decided to stop running new campaigns.
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