GST Council may defer decision on taxing crypto assets in June 28-29 meet

business-standard.com:

The Goods and Services Tax (GST) Council is unlikely to take a call on taxing virtual digital assets (VDA) or crypto assets in its upcoming meeting and may ask two states, Haryana and Karnataka, to study the nature and taxability of various activities in the crypto ecosystem.

The Council is set to meet on June 28 and June 29 in Chandigarh.

The GST fitment committee, comprised of central and state officials who are reviewing the issue, has deferred the matter as it felt it requires deeper study, according to people privy to the development.

The move follows the demand from crypto industry players seeking clarity over concerns and scepticism on the VDAs from GST perspective. At present, there is no specific provision for virtual assets in the GST regulations. It is levied at the rate of 18 per cent only on services provided by crypto exchanges, which are categorised as financial services.

"After an extensive discussion on various activities associated with taxability of crypto currencies and non-fungible tokens, the fitment panel felt that the issues involved in the crypto ecosystem need deeper study. It was decided that Haryana and Karnataka shall study all aspects and submit a paper before the commitee in due course.

The states (Haryana and Karnataka) have been tasked to study and identify all relevant supplies associated with crypto-ecosystem which are under the ambit of GST; their nature whether those activities are goods or services and their applicable rate based on appropriate classification, person citec above said.

The panel noted that crypto assets refer to algorithm based decentralized convertible virtual assets protected by crypto-graphy. Crypto ecosystem involves various activities including mining, exchange