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Crypto Exchanges of India Unite for Clarity of Tax Rules

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Crypto Exchanges of India Unite For Clarity of Tax Rules

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  • Indian crypto exchanges are urging the RBI to lay out clear regulations as the banks are still denying services amid ambiguous ruling.

The crypto exchanges of India are seeking for clear-cut taxation regulations surrounding cryptocurrencies. This comes after the Supreme Court lifted banking restrictions on crypto exchanges exactly two months ago.

As reported by India Times on 4 May 2020, the crypto exchanges have jointly written to the RBI to clear the air of confusion surrounding the legal status of cryptocurrencies as banks continue to deny services to exchanges. The CEO of a popular exchange believes that the RBI has still not issued a new circular directing the banks about the reversal of the central bank’s ban.

As per the report, the exchanges also want a clarification pertaining to the type of classification of the operations – as commodity, currency, goods or a service. This has a direct influence on where they stand in the country’s Goods and Services Tax (GST) framework.

Praveenkumar Vijayakumar, the chief executive of crypto exchange Belfrics Global, stated:

“If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard. In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive.”

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