The Fitment officers Committee determined that it was essential to list all relevant supply related to the crypto-ecosystem that are subject to GST, together with their type—whether they are products or services—and the associated rate.
The GST Council has been advised to postpone a judgement regarding the taxability of cryptocurrencies and other virtual digital assets by the officers committee on GST.
A law governing cryptocurrencies is expected, according to the Fitment Committee’s recommendation to the GST Council, and it would be crucial to identify all pertinent suppliers connected to the crypto-ecosystem in addition to classifying them as products or services.
The Fitment Committee, a group of officers from the centre and the states, believed that a more thorough investigation of the problems relating to the crypto environment was necessary.
It was determined that Haryana and Karnataka will research every angle and present a presentation to the Fitment Committee as soon as possible.
The committee believed it was necessary to include all pertinent supply related to the crypto-ecosystem that fall under the purview of GST, together with their nature—whether they are products or services—and the corresponding rate.
Therefore, it recommended that the Council postpone a decision regarding the taxation of cryptocurrencies at its next meeting on June 28–29.
Regarding the imposition of income tax on bitcoin assets, the 2022–23 Budget has offered clarity; nevertheless, in terms of the Goods and Services Tax (GST), it is still unclear whether cryptocurrency is classified as a good or a service.
As on April 1, these transactions are subject to the same 30 percent income tax, cess, and surcharges as winners from horse races or other speculative trades.
Additionally, a 1% TDS has been implemented starting on July 1 for payments made in virtual currencies that exceed Rs 10,000. For designated persons, such as individuals or HUFs required to have their accounts audited under the I-T Act, the threshold limit for TDS will be Rs 50,000 per year.