A number of Indian bitcoin exchanges have questioned the government of India for imposing GST on its business.
According to a press report in the Economic Times, seven Indian bitcoin exchanges, including Unocoin, Zebpay and COinSecure, are planning to contact Authority for Advance Rulings (AAR), the Indian income tax ruling agency, and would like to learn more about how to Business is classified under the current tax regime for goods and services.
According to an Indian official who understands the matter, at least one bitcoin exchange has applied to AAR, the income tax ruling agency in Maharashtra, India, hoping to clarify its tax obligations. The official said:
"The Indian tax department is studying the concept of bitcoin because Bitcoin is a very complex issue."
Under the current Indian Income Tax on Goods and Services, India does not impose any tax on Bitcoin if it is considered a currency. However, Bitcoin is subject to an 18% excise tax if it is considered a commodity and a 12% tax rate if it is considered a service.
In an interview with The Economic Times, Abhishek A Rastogi, a partner at Khaitan & Co, an Indian law firm, said whether the tax on the total revenue of the Indian Bitcoin exchange should be taxed under the current tax on goods and services, or The issue of taxing its profits has not been clarified either. He added:
"The tax authorities have to figure out exactly what Bitcoin exchanges sell for goods or services, or purely trading platforms that simply make money."
About a month ago, the Indian tax department visited a number of Bitcoin transactions in the country four, because they suspected that some exchange customers tax evasion problems.