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India to reduce GST paid on cryptocurrency exchanges from 18% to 1% through regulatory reclassification

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According to a report from CNBC TV18 India, the nation’s government plans to reclassify cryptocurrency exchanges as e-commerce platforms, which will reduce the Goods and Services Taxes (GST) users must pay per transaction, or per trade, to 1%. 

Currently, the Indian Government levies an 18% GST on transactions conducted on registered cryptocurrency exchanges, which is passed to users as trading fees. The process is similar to the tax protocol of India’s stock brokerages.

However, depending on the legal domicile of the exchange, the new GST proposal could result in more tax liabilities for certain users. Back in July, Business Insider India reported that the government may ask foreign cryptocurrency exchanges to charge the same 18% GST as domestic equivalents to their clients when conducting business with Indian nationals. Overseas crypto exchanges are typically exempt from GST registration in India, resulting in a sizable tax gap…

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