In this article we will discuss how the traders of cryptocurrency should liable to pay GST on exchange of Cryptocurrency in India.
Treating Bitcoin or Cryptocurrency as a Goods
Definition of Goods and Services
Definition of Goods –GST Act’ 2017- Section 2(52)
The term “Goods’’ means each type of movable property other than money & securities but includes actionable claims, growing crops, grass & things attached to or land’s forming part which are agreed to be severed before supply or under a contract of supply.
Goods include:
- Every kind of movable property.
- Actionable claims.
- Growing crops, grass and things attached to or land’s forming part which are agreed to be severed before supply or under a contract of supply.
A goods does not include:
- Money and
- Securities
Where definition of money includes:
As defined in Section 2(75) of CGST Act’ 2017 the Meaning of term “Money” “is Indian legal tender or any foreign currency, cheque, draft, pay order, traveller cheque, promissory note, bill of exchange, postal or electronic remittance, , letter of credit money order, or any other instrument recognized by the RBI (Reserve Bank of India) when used as consideration to settle an obligation or exchange with Indian legal tender of another denomination but will not include any currency that is held for their numismatic value.
As defined in Section 2(90) the meaning of term “Securities” shall have meaning assigned to it in sub-section (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). Goods must be moveable to be classified as Goods under Goods and Services Tax Act.
Securities: “securities” include—
(i) Shares, debentures, stocks, debenture stock, scrips, bonds or other marketable securities of a same nature in or of any incorporated company or other body corporate;
- derivative;
- Units or any other instrument issued to the investors in such scheme by any collective investment schemes;
- Security receipt as per the definition in clause (zg) of section 2 of the SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act)
- Under any scheme of mutual fund units or any other such instrument issued to the investors;
(ii) Government securities;
- such other instruments as may be announced by the Central Govt. to be securities; and
(iii) Rights or interest in securities;
Conclusion:
It adduces that cryptocurrency/ Bitcoin is not a money according to the definition of GST and nor a securities. Since it is movable in nature and falling under the definition of goods, based on that Goods and Services Tax should levied on the entire transaction value as per time and value of supply.