CBIC asks details from India’s top crypto exchanges about digital assets

The Central Board of Indirect Taxes and Customs (CBIC) has requested information from the major cryptocurrency exchanges on the different kinds of digital currencies and tokens that are traded on their exchanges.

It has also requested additional information, such as the value of coins and tokens and how they might be divided.

The organisation is working on the definition and categorization of the crypto asset class to assess the taxability on the value of each transaction in order to bring cryptocurrency assets under the purview of the goods and services tax (GST).

“We conducted discussions with crypto exchanges over a variety of topics pertaining to the asset class. We have requested a full report on the various crypto goods being traded and their corresponding transaction fees and how they are getting calculated,” a senior official said.

In order to put cryptocurrency assets under the purview of the goods and services tax, the CBIC is apparently also laying out the taxability of cryptocurrency transactions (GST). The classification and description of the cryptocurrency asset class are also being worked on.

It would be simple to assess how it could fit into the GST regime and the corresponding tax rate if one had a good notion of the value of these digital products and mode of transactions, the official continued.

This month alone, information from cryptocurrency exchanges has been requested.

All cryptocurrencies have different kinds of tokens, but utility and payment tokens are the most popular. These have no legal protection or assurance for their investment.

The service offered by cryptocurrency exchanges is now subject to an 18% tax and is regarded as financial services.

The topic of crypto assets has been discussed for a while in India. India has not yet made clear where it stands on whether to legalise or ban digital tokens. They pose a threat to the financial stability of the country, the Reserve Bank of India has repeatedly stated.

In order to regulate these assets, the government is advocating for international cooperation.

The Crypto Asset Reporting Framework has been created by the Organization for Economic Cooperation and Development in the meantime (CARF). In terms of the direct tax system, the Center has designated cryptocurrencies as virtual digital assets (VDAs).

VDAs are any information, code, number, or token generated using cryptographic techniques or in another way that is not the Indian rupee or another currency, according to the tax laws of India.