The Central Economic Intelligence Bureau (CEIB), a division of the union finance ministry has put forward a proposal to impose 18 percent GST on bitcoin transactions. The CEIB told the Central Board of Indirect Taxes & Customs (CBIC) that government could potentially gain Rs 7,200-Cr annually on bitcoin trading.
The CEIB has done a study on levying GST on crypto-currencies. Accordingly, It suggested finance ministry that bitcoin can be categorized under the 'intangible assets' class and GST could be imposed on all transactions. It added that crypto-currency can be treated as currents assets and GST charged on the margins made in its trading.
The RBI had virtually banned crypto-currency trading in 2018 and had directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating any person or entity in dealing with or settling those
Currently, bitcoin, as a medium of payment, has neither been authorised nor been regulated by any central authority in India. Further, no set rules, regulations, or guidelines have been laid down for resolving disputes that could arise while dealing with bitcoin. Hence, bitcoin transactions come with their own set of risks.
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