Indian crypto exchanges approach central bank for regulatory clarity

Indian crypto exchanges approach central bank for regulatory clarity

Indian crypto exchanges and firms are still seeking regulatory clarity from the central bank following a Supreme Court ruling in favor of the industry earlier this year.

The Reserve Bank of India (RBI) has been making every effort to prohibit any dealings in crypto assets by individuals and businesses in an anti-crypto crusade that began two years ago.

In March this year, the Supreme Court overturned the ban, opening the door for the crypto industry in India.

Fast forward to two months after, crypto exchanges are still seeking clarity on their status from the central bank which has been procrastinating ever since it lost the court battle.

According to reports, crypto exchanges have written to the RBI seeking regulatory clarity and tax status.

Exchanges are asking for crypto to be categorized as a commodity, currency, goods, or a service, as this will affect how they are taxed under GST (Goods and Services Tax) framework.

Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global, was quoted, saying:

“If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard. In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive.

The report added that the indirect tax department had launched an investigation into crypto exchanges operating in India to ascertain the GST rate that can be levied on them.

Image courtesy of vishnudeep dixit/Pexels

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