GST on Supply of Cryptocurrency, NFT, and VDA in India

Income Tax on VDAs: Flat Rate: Income from cryptocurrencies, NFTs, and VDAs is taxed at 30% under Section 115BBH. TDS: A 1% Tax Deducted at Source (TDS) is applied to cryptocurrency transfers under Section 194S. GST Classification: Not Money or Securities: VDAs are not classified as money or securities. Movable Property: VDAs are considered movable property and thus classified as goods under the GST Act.

GST Applicability: Sale of VDAs: The sale of VDAs like cryptocurrency and NFTs is taxable under the GST Act. Crypto Exchange Services: Services provided by crypto exchanges are taxable, and exchanges must collect GST from traders. Reverse Charge Mechanism: If a crypto exchange is outside India, the trader in India must pay GST on a reverse charge basis.

Seller Responsibilities: GST Collection: Sellers must collect GST from buyers during the sale of cryptocurrency. Deposit GST: The collected GST must be deposited with the government. HSN Code and GST Rate: HSN Code: Use HSN Code 960899 for digital assets. GST Rate: The applicable GST rate is 18%.

GST Registration: Threshold: Sellers must register for GST if their annual turnover exceeds INR 40 lakhs. Post-Registration: Registered sellers must collect and remit GST on crypto transactions. Input Tax Credit (ITC): Eligibility: ITC can be claimed for GST paid on purchasing VDAs and business-related services like consultancy and software.