Earlier this month, the Goods and Services Tax (GST) was implemented in India and reports now suggest that the government is now considering bringing digital currencies under its scope.
According to a latest report from The Hindu, the Indian government is considering a regulatory framework for digital currencies, which would include levying of GST on their sale. In addition, this might also bring digital currency-related trading activities under the purview of the country’s stock market regulator, Securities and Exchange Board of India (SEBI).
Speaking with The Hindu, a senior government official said the pros and cons of banning or regulating digital currencies has been already put forth in a meeting last month. Another official told the publication house:
“Banning will give a clear message that all related activities are illegal and will disincetivise those interested in taking speculative risks, but it was pointed out it will impede tax collection on gains made in such activities and that regulating the currency instead would signal a boost to blockchain technology, encourage the development of a supervision ecosystem (that tracks legal activities and may also assist in tracking illegal activities) and promote a formal tax base.”
The news follows the setting up of an inter-disciplinary committee in April, tasked to examine the digital currency regulatory framework. The committee had three months to submit its report on the topic.
Digital currencies have shown exceptional growth this year. Bitcoin price hit an all-time high of $2980 (Bitstamp) in June, so did Ether as ETH/USD hit 417 levels (BTC-e).
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