Indian bitcoin exchanges are raising questions over the applicability of goods and service tax (GST) to their operations.
An official familiar with the matter told the news source that at least one bitcoin exchange has already filed an application with the Maharashtra state AAR to clarify ambiguities over its tax liability.
Under the GST rules, if bitcoin is considered to be a currency, there would not be any taxes applicable, ET states. However, if it is recognized instead as a good, GST at 18 percent could be applicable, or, in the case of it being deemed a service, 12 percent.
Abhishek A Rastogi, a partner at law firm Khaitan & Co, told ET that there is ambiguity for bitcoin exchanges over whether GST is applicable on total revenue or merely on margins earned. He continued to say, "the tax authority must give clarity on whether bitcoin exchanges are selling goods and services, or are mere trading platforms that earn margins."
The move comes a month after the Indian tax department visited bitcoin exchanges across the country seeking to identify users. The operation was carried out over suspicions of tax evasion by some exchange customers.