The government is working to classify cryptocurrency as goods or services under the GST act, allowing for taxation on the entire transaction value. Currently, an 18 percent Goods and Services Tax (GST) is levied on crypto exchange services, which are classified as financial services. GST officers are of the view that cryptocurrencies are similar to lottery, casinos, betting, gambling, and horse racing in that they are taxed at a rate of 28 percent on the total value.

Furthermore, in the event of gold, a 3 percent GST is paid on the whole transaction amount. "There is a need for clarity on the GST levy on cryptocurrencies and whether it has to be levied on the entire value," an official said. "We are looking into whether cryptocurrencies can be classified as goods or services, as well as removing any doubt about whether it can be called an actionable claim." An official said, if the GST is imposed on all cryptocurrency transactions, the rate may be in the region of 0.1 to 1 percent.

Because there is no clear definition of cryptocurrency in the Goods and Services Tax (GST) law, and because there is no law governing such virtual digital currencies, the categorization must consider whether the legal framework qualifies it as an actionable claim.

Government clarifies that there is no plan to introduce cryptocurrency

Joe Biden signs executive order on cryptocurrencies

Cryptocurrency exchange Coinbase has blocked 25000 Russian-linked accounts