MUMBAI: There have been questions regarding Bitcoins pondering in every mind that whether Bitcoin exchanges are subjected to pay goods and services tax? If they are, what would the rate be? And, will GST be levied on the revenues or operating margins of these exchanges? Zebpay, Unocoin, CoinSecure and BtcxIndia, are India’s top seven Bitcoin exchanges which plan to approach the Advance Authority of Ruling (AAR) for clear answers to these questions.
AAR is a quasi-judicial body that can decide the applicability of tax rates. “At least one Bitcoin exchange has already filed an application with the Maharashtra AAR for future tax liability,” said one of the persons cited above. “The tax department is currently researching the concept of Bitcoins is a very complex subject.” Zebpay, Unocoin, CoinSecure and BtcxIndia didn’t respond to queries. The development follows the income-tax department conducting searches at top Bitcoin exchanges in December.
The indirect tax department is already looking at ways in which Bitcoins can be brought under GST. In December the indirect tax department had launched an investigation into Bitcoin exchanges operating in India to ascertain the GST rate that can be levied on them. The sales tax department and VAT authorities launched an investigation on the taxability of Bitcoins in the last financial year.