Tally for CAs in Industry Silver Edition (Single User) Tally Renewal (Auditor Edition) Need Tally for Clients? (Tie-up with us!!!)
Open DEMAT Account with in 24 Hrs and start investing now!
GST - Goods and Services Tax »
Open DEMAT Account in 24 hrs
 CAIT urges Centre to exempt GST registration for e-commerce sales
 AAAR ruling on salary to impact head office-branch GST dynamics
 How real is the GST boost?
 GST on helmets equivalent to compromising road safety. Here's why?
 ICAI writes to CBDT seeking waiver of penalty on late filing of income tax audit reports
 Attention GST taxpayers! File GSTR-7 return for Dec before 10 Jan. Details here
 Tax cloud over cryptocurrency exchanges as income tax department eyes probe
 Govt extends GST annual return filing deadline for FY21
 GST Annual Return: CBIC extends deadline of GSTR-9 and GSTR-9C
 GST Council meet on Dec 31, rate rationalisation on agenda
 Know Top 10 changes in GST Law effective from January 1st, 2022
 If Assessee has to pay Service Tax even after introduction of GST, their Right to avail ITC cannot be denied: CESTAT
 GST officers can directly initiate recovery action against errant businesses that show higher sales in monthly return GSTR-1 but under-report it while tax payment in GSTR-3B.
 CBI arrests GST Superintendent in a Bribery Case
 Centre urged to defer GST rate hike on apparels

Tax cloud over cryptocurrency exchanges as income tax department eyes probe
January, 05th 2022

Fresh trouble could be brewing for the cryptocurrency exchanges as the income tax department is now contemplating investigating them over the tax applicable to their total income. This comes after the Goods and Services Tax (GST) department conducted searches in the past week on the crypto exchanges. The direct tax department could look into the quantum of corporate tax payable for the cryptocurrency exchanges, said people aware of the development.

In the last week, the Directorate General of GST Intelligence (DGGI), an investigation arm of the indirect tax department, conducted searches on several crypto exchanges and asked them to pay GST on their transaction fees or margins. The fear is that the tax department will question the way exchanges record their revenues.


"There is no clarity in the way the exchanges recognise revenues. Each firm does it as per their understanding of accounting and the income tax officials have concerns over the ambiguity," a person aware of the development said. "In some cases, the revenue recognised is several times more than the margins for exchanges. Margins are the real revenue for the exchanges, but that will need to be established with the tax department," a senior tax lawyer advising at least two prominent exchanges told  ..

Then there is the matter of the tokens issued by the exchanges and how to capture the increase in their value. Both the direct and indirect tax departments have started sharing data with each other to ensure better tax compliance.

The indirect tax department has already collected the data during the recent searches over non-payment of GST, and the data is now being shared with the direct tax department for further investigations. The department discovered that several cryptocurrency exchanges have been holding entities in tax havens like the Seychelles, the British Virgin Islands (BVI) and Mauritius.


Another person aware of the development said: "Holding structures and the way money is being sent out of the country could create income tax trouble for some of the cryptocurrency exchanges too".

At the core of the problem is how cryptocurrencies are categorised without any regulations in place.

Income tax rates on returns from various assets, such as currency, stock, gold, technology, services, or the lottery, can range from 10-42%. "From the taxability and valuation perspective, GST on cryptocurrency has been a subject matter of dispute. There is no clarity regarding whether cryptocurrencies are goods or services, but trading in cryptocurrency is not illegal," said Abhishek A Rastogi, partner at Khaitan & Co.

 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2022 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting