The GST Council, which is scheduled to meet next week, is likely to discuss goods and services tax (GST) on cryptocurrency transactions in the meeting. The panel may not finalise a rate in the upcoming meeting but discussions may be held on placing it in the highest tax slab of 28 per cent, according to a media report.
The Council is seeking to broaden the tax net to track dealings in virtual digital assets in a more effective manner, said the Bloomberg report adding that a finance ministry spokesperson did not immediately respond to calls seeking comments.
The 47th meeting of the GST Council will be held on 28-29 June (Tuesday and Wednesday) at Chandigarh.
Finance Minister Nirmala Sitharaman in the Union Budget 2022 announced that the government will levy a steep tax at a flat rate of 30 per cent on virtual assets, including cryptocurrency and non-fungible tokens or NFTs. The Budget also introduced the provision of tax deducted at source at 1 per cent levied on payments made of transfer of virtual assets.
During the 47th meeting, the GST Council, headed by Finance Minister Nirmala Sitharaman, is also likely to discuss pruning the list of exempted items, plan to shift rate slabs, and proposal to correct inverted duty structure in textiles. It might discuss a proposal to shift rate slabs from the current five per cent to seven or eight per cent; and from 18 per cent to 20 per cent. The Council may also discuss the proposal to correct inverted duty structure in textiles.
The Council-appointed group on ministers (GoM), headed by Karnataka Chief Minister Basavaraj Bommai, has already conducted its meeting to these discuss issues. The GoM, according to a PTI report, was unable to reach a consensus. The report said the Group of Ministers will, however, present a status report to the GST Council on the consensus that was arrived at the previous meeting of the GoM on November 20, 2021. The panel, which was set up in September last year, last met in November 2021.
Currently, there are four GST slabs — 5 per cent, 12 per cent, 18 per cent, and 28 per cent. The 18 per cent slab has 480 items, from which about 70 per cent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.
GST Collections in May hit an amount of Rs 1,40,885 crore, which was a 44 per cent year-on-year jump. However, it was a drop of 16 per cent as compared to the GST collections in April. The gross GST revenue collected in May 2022 was Rs 1,40,885 crore, of which CGST is Rs 25,036 crore, SGST is Rs 32,001 crore, IGST is Rs 73,345 crore (including Rs 37,469 crore collected on import of goods) and cess is Rs 10,502 crore (including Rs 931 crore collected on import of goods).