Indian crypto exchanges want tax clarifications from Central Bank

India’s Supreme Court reversed the ban placed by the Reserve Bank of India (RBI) on financial institutions providing crypto-related banking services. Following this reversal, the digital assets exchanges in the country are now seeking clarification on their taxation duties.

Today, many crypto exchanges in India sent a collective letter to the RBI on the absence of proper tax regulation. They claimed the lack of clarity on taxation has allowed the banks to keep denying services to exchanges doing crypto-related business.

According to the report, the exchanges have contacted the High Court of India to resolve the situation.

Crypto exchanges need clarification on GST

The crypto exchanges in the country are seeking clarifications on the nature of their operations. They want to find out if the regulatory bodies will classify their crypto business as dealing with services, commodities, currencies, or mere goods. According to the exchanges, it’s important to understand their taxation requirements to know if they would be classified under India’s Goods and Services Tax.

According to the chief executive of cryptocurrency exchange Belfrics Global, Praveenkumar Vijayakumar, India’s digital currency exchanges may have a face-off with India’s tax authorities if the digital assets are included in the GST.

 “In the wake of the recent Supreme Court ruling, we have also approached the RBI for clarity on this,” he said.

Praveenkumar further stated that many exchanges will find it extremely difficult to survive if they have to pay GDT on every transaction.

Banks need to resume dealings with crypto-based firms

According to the chief executive of security research company Credbaco Global, Sidharth Sogani, the RBI needs to issue a directive for India’s banks to resume banking relationships with crypto exchanges. As the central bank’s ban has been reversed by the Supreme Court, RBI must remind the banks to resume business with crypto-based companies.

But Sogani said several banks have denied receiving any directive by the RBI to do business with crypto-based firms.

Crypto market in India is still underwhelming

Co-founder and chief executive of crypto exchange Onocoin, Sathvik Vishwanath, revealed that the population of Indians doing crypto-based business is still very small and not represented on a global scale. He said despite the population of the country, the ratio of people doing crypto-based business if far lower than expected. The trading activity on crypto is 1%. He said the country would need about 24 months to meet up to a global scale.