India’s Existing Law Might Mandate A 2 Percent Levy On Digital Assets Purchased From Offshore Exchanges

The current Indian law could sanction a 2% levy to be implemented on the crypto transfers from the offshore exchanges working in the Indian market. As the local sources report, it is expected that the equalization levy, which is 2%, could be implemented on the purchases of the crypto-assets just as it is enforced on the paper currency.

Economic Times reported on 22nd June that the analysts had indicated an expectation from the currently practiced law to impose a 2% levy to be added on the adjustment of the price of cryptocurrency purchased from the companies held by overseas crypto exchanges working in the market of India.

The government introduced the equalization levy in 2016, charging a 6% tariff over the payments specified for e-commerce supply and others that provide services to the overseas firms having a momentary settlement in India. After that, in mid-2020, the equalization levy was amended. A the time, the updated legislation of “Google Tax” has implemented a 2% tax to be collected from the e-commerce service providers, which are off-shore and operating businesses from India. It has been pointed out by the tax experts that the crypto exchanges are foreign-based and providing services to Indian consumers.

The wording of the equalization levy indicates that its premises will also include cryptocurrency purchased from the foreign exchanges working in India as overseas, as told by the founder of Transaction Square (a tax advisory company) named Girish Vanvari to the Economic Times. He further mentioned that the levy would be implemented on the selling price, and it may be required for them to add it into the crypto-assets cost.

The tax partner at AKM Global (a tax consulting company) named Amit Maheshwari argued that the imposition of a 2% levy over the respective crypto assets without the establishment of a regulatory apparatus across the border would be pretty much problematic for the government.

The anti-crypto policy seems to have been maintained by the RBI (Reserve Bank of India). The aforementioned stance is evidenced by the words of Shaktikanta Das, the Governor of RBI, revealing that it has been informed to the government that the central bank is facing serious issues in the case of cryptocurrency.