Is GST Applicable on Cryptocurrency in India?

is gst applicable on cryptocurrency
Although the union budget of 2022 put crypto at its forefront, there are still some grey areas that need to be addressed. One of these areas is the question - Is GST applicable on cryptocurrency? Let us answer that for you.

Cryptocurrency isn’t a physical asset, it’s forms part of the virtual asset and well, virtual assets are taxable too. How can we forget the  Union Budget 2022?

Even though we’re very clear about the crypto taxation front, there are still areas like the GST on your crypto that needs to be addressed.

This blog post is an in-depth explanation of whether GST is applicable to cryptocurrency or not.

Understanding Digital Assets under GST in India

The Goods and Services (GST) Act doesn’t specifically define any crypto or digital assets under it.

But when you look at the pure definition of GST in India, a virtual digital asset (VDA) refers to a number or token which is generated through a cryptographic means and thus is considered a digital transaction.

These VDAs could be stored or transferred electronically in exchange for money. It even includes non-fungible tokens (NFTs) and other digital assets notified by the central government.

Are Cryptos Taxable under GST?

Before we figure out whether cryptos are taxable under GST or not, first, we need to understand GST.

The Goods and Services Tax (GST) is a digitized version of Value Added Taxes in India. 

  • The Goods part refers to movable properties, like money, goods, or securities,
  • while the Services part refers to every other form of value.

Now consider your crypto holdings. They are neither money nor securities. Being decentralized on their own, they are not governed by any jurisdictions. This means that cryptos are not taxable under GST.

Keeping accurate records of your transactions is important to calculate your gains for tax purposes. Check your’s now.


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Is Crypto Sale taxable under GST?

As per the Schedule III of the GST Act, there’s a list of exemptions that doesn’t include specific assets and transactions.

Some of these non-exemptions include the sale of crypto, NFTs, or other digital assets.

This means your crypto sales or other VDAs aren’t taxable by GST.

 Understand how Crypto Profits are taxed in India.

Some Ambiguities about GST on Cryptocurrency

Cryptocurrency taxation under GST is a relatively new and evolving area, and there are several ambiguities and challenges that need to be addressed. 

Here are some of the common ambiguities: 

  • Classification of cryptocurrencies:  Some countries consider cryptocurrencies as goods or services, while others treat them as intangible assets or property. The lack of a global uniform classification creates uncertainty and confusion for taxpayers and makes it challenging to determine the applicable GST rates. 
  • Determination of value: The valuation of cryptocurrencies can be challenging, given their volatile and fluctuating nature. It can be difficult to determine the fair market value of a cryptocurrency at the time of the transaction, which is essential for computing GST liabilities. 
  • Treatment of mining and staking activities: Cryptocurrency mining and staking activities involve the use of computing power to validate transactions and earn new units of cryptocurrency. However, it is unclear how mining and staking activities should be treated for GST purposes.

For your tax-related concerns on crypto, KoinX easily generates a full-fledged report from your portfolio to give you a comprehensive tax statement.

You can also skip all the technicalities and calculations of crypto taxes yourself and let KoinX do it for you.


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