After RBI Ban Lifted, Indian Crypto Exchanges Approach Central Bank Over Taxation Clarity

While the decision against banking bans against crypto companies, a collective letter from crypto companies in India seek clarity on where they stand in the region.

Back in March, the Supreme Court of India delivered a historical judgment against banking bans imposed by the Reserve Bank of India (RBI)’ against the crypto service provider.

This offered a much-needed lease of life to the uncertain crypto community and also helped in reviving many crypto exchanges and service providers who had to abruptly shut their operation after RBI released a circular back in April 2018, prohibiting any bank from offering their service to them.

However, there are still no regulations around the crypto space in the country, and thus these crypto service providers are still uncertain about the taxation process and how the government is going to tax their business.

The absence of clear guidelines has led to several banks still refusing to offer their service despite the judgment from the supreme court.

Now, these crypto platforms have collectively written a letter to the RBI seeking clarity from the central bank over their regulatory status in the financial ecosystem, reported ET.

The Details of the Letter

The letter was a request for clarity over their legal status and whether they fall under the category of commodity, currency, goods, or a service, as this would determine how these platforms are taxed under the Goods and Services Tax (GST) framework.

Praveenkumar Vijayakumar, Chairman & CEO Belfrics Global commented on the dilemma saying:

“If the digital assets are not exempted from GST, the digital currency exchanges in India are going to have a standoff with the tax authority. In early 2019, the tax department had reached out to several cryptocurrency platforms in this regard.

In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this, as if we pay GST on the whole transaction, then most platforms would not be able to survive.”

These concerns sound legitimate since in the past the indirect tax department has initiated an investigation into Bitcoin and other altcoins to determine whether these digital assets could be brought under the GST.

Apart from that the department also launched an investigation towards different crypto exchanges to determine which bracket of GST rate can be levied on these exchanges.

A recent RTI filed by Naimish Sanghvi of CoinCrunch seeking a response on whether the regulators are working on any form of regulatory framework or policy for digital assets and whether the RBI has notified the banks about the lifting of the ban on virtual currencies.

The RBI responded to the query suggesting that under the sections of 2(f) of the RTI act these queries did not qualify as a piece of information.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Rebecca Asseh
Rebecca Asseh
Rebecca Asseh is a blockchain and cryptocurrency journalist fascinated with sharing the knowledge of this technology in the simplest language possible.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Goldman Sachs’ Lazy Bitcoin Assessment is Embarrassing

Crypto community has been eagerly awaiting Goldman Sachs’ client call today in which they were to discuss bitcoin. But it all turned out to be...

Crypto Derivatives Exchange ErisX, Opens API Service for BCH, BTC, ETH, and LTC Block Trading

ErisX REST API will now grant registered clients access to their Block Trade platform. This will be a reserve for the Institutional investors...

Polkadot’s Chain Candidate Goes Live in Anticipation for the Proof of Stake (PoS) Version

Polkadot's initial mainnet has been launched by Web3 Foundation and Parity Technologies according to a blog post on May 26. This much anticipated sharding...

Bitfury Announces Bitcoin Mining Investment Program For Institutional Clients

Bitfury, one of the oldest Bitcoin mining firms established back in 2011, has announced a Bitcoin mining investment program for institutional investors on May...

7 Bullish Ethereum Charts that says Ether is “Significantly Undervalued”

The price of Ether might still be struggling around $200 but its fundamentals are screaming bullish. Post Black Thursday sell off, Ether has been seeing...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today