India's Goods and Services Tax (GST) Council is weighing a proposal to impose a 28% tax on all cryptocurrency transactions, according to a report by CNBC-TV18 on Monday.
"The proposal is to levy 28 percent GST on services and all activities related to cryptocurrencies soon,” a source familiar with the issue told CNBC-TV18. The matter remains under discussion by a "law committee" working for the council.
If passed, the new tax would increase the overall tax burden for the cryptocurrency sector in India. The proposal comes a month after India's finance ministry began imposing a 30% tax on all personal income generated from cryptocurrency.
GST is an indirect tax paid on all goods and services in the country. It's governed by the GST Council. Under the current GST system, there is an 18% tax rate levied on crypto transactions classified as financial services by crypto exchanges.
According to the report, the objective of the latest proposal is to bring crypto-specific GST taxes into line with tax rates proposed for online gambling and betting services in India.