At present, an 18% GST is levied on services provided by crypto exchanges. These are categorised as financial services. It is being studied which other crypto activities may fall under GST net. Mining of cryptos and the use of virtual digital assets (VDAs) as a medium of exchange may come under the tax net.

Crypto assets are algorithm-based and are decentralised virtual assets protected by cryptography. There are various activities in the crypto eco-system — mining, exchange, payment processing, barter and different transactions. There are onshore and offshore transactions. There should be clarity on goods and services. Cryptos have to be properly classified.

In the budget for FY 2023, the government has already imposed 1 per cent TDS on all VDA transactions. The transfer of VDAs attract on 30% on gains, with no deductions or set-off losses.