The Indian government wants a piece of the crypto action.
The Finance Ministry has called for the enactment of bitcoin tax laws, according to the Times of India. The ministry’s Central Economic Intelligence Bureau (CEIB) recently submitted a draft document that proposes imposing an 18% goods and services tax (GST) on bitcoin trading.
The CEIB estimates that the bitcoin transaction volume in India exceeds $5.4 billion, which means an 18% tax could generate revenue of about $970 million.
As part of the proposed plan, the CEIB is calling for cryptos to be classified as “intangible assets,” which would make profits made from trading subject to the GST, Cointelegraph reports.
Tanvi Ratna, CEO of Indian crypto policy advisory firm Policy 4.0, tweeted: “Sadly, this does not necessarily imply that crypto will be legal. Under Indian law, illegal income is also taxable & evading its tax counts as criminal activity.”
In 2011, the Finance Ministry confirmed that tax evasion on illegal sources of income was a criminal offense. At the time, the government was reportedly in the process of reclassifying all forms of tax evasion as criminal.
In March, the Supreme Court reversed the Reserve Bank of India’s ban on banks servicing crypto exchanges, but little progress has been made on the regulatory front since then, which observers say has deterred potential investors in the nascent industry.