An Indian panel comprising Federal and State finance ministers will reportedly meet next week to take a unanimous decision on all sales taxes associated with crypto transactions. As reported, the panel intends to discuss goods and services taxes in a bid to finalize whether to impose a new tax on crypto or not. The meeting will unfold within two days, beginning on June 28 at Chandigarh.
The proposal for a review of the taxes obtainable on crypto transactions manifested by a government-appointed task force. However, the panel appears unlikely to finalize a certain rate in the next week’s discussion. But the members of the panel intend to consider reviewing the tax law by imposing a 28% tax peg. This development if passed prone crypto investors to losing 58% of their crypto profits to tax payments. The panel plans to consider the extension of the tax net to keenly supervise all transactions in the digital industry.
Although, as of press time, the members of the panel are yet to reach a mutual agreement on the tax extension proposal. However, reports confirm that they intend to assess the obtainable trends, including tax evasions in the industry to determine a position. More so, the Indian Panel may not conclude on the rate to be attached to crypto transactions at the meeting.
The imposition of a 30% tax rate by Indian Authorities
Recall that Indian regulators recently imposed a 30% tax on cryptocurrency trading on crypto investors across the country. The implementation of the imposed 30% crypto tax rate started in February. According to the finance minister, Nirmala Sitharaman, the country took a beneficial step toward the regulation of the crypto industry.
As expected, the imposed 30% tax rate overwhelmingly affected the volume of crypto trading within the country. The country recorded a dramatic fall in trading activities of crypto exchanges within the first two months of the tax implementation. For instance, the the trading activities of Coinbase and FTX grossly declined by about 30% within the first few months. More so, the implications of the imposed tax rate forced some of the exchanges out of the Indian crypto market.
Last month, India’s Goods and Service Tax Council (GST) proposed a reduction in the imposed tax rate on cryptocurrencies. The council recommended the consideration and implementation of 28% taxation on crypto profits of investors. However, federal and state finance ministers will evaluate the proposal during the two days meeting.