High taxes on cryptocurrency to ‘dissuade’ people from investing: Sushil Modi in RS

The central government has announced imposition of taxes in the “highest slab” for digital assets such as cryptocurrencies and NFTs to “dissuade” people from investing in them because they are “highly speculative and volatile”, Rajya Sabha lawmaker and BJP leader Sushil Modi said in Parliament on Tuesday.

The BJP leader also raised concerns over the use of cryptocurrencies and urged the government to impose GST on the entire transaction for such digital assets.

The BJP leader brought up the issue during the Zero Hour in Rajya Sabha and referred to Finance Minister Nirmala Sitharaman’s announcement while presenting Union Budget 2022-23 on February 1.

The Budget last week proposed imposing a tax of 30 per cent on virtual assets, effectively legitimising the trading of private cryptocurrencies and non-fungible tokens (NFTs).

Virtual digital assets have been taxed in the “highest slab” and “that is without any exemption”, the BJP MP said, adding: “This has been done to dissuade people from investing in crypto because it is highly speculative and volatile,”

The MP stressed that a cryptocurrency has no “intrinsic value” and appealed the government to impose GST on all of its transactions.

He said that the government levies 18 per cent of the Goods and Services Tax (GST) “only on service provided by the crypto exchange and is treating it as financial services, but cryptos (currency) are similar to lottery, casinos, betting, gambling, horseracing, which have 28 per cent of GST…”

Even on gold, he said, the GST is levied on the entire transaction value. Hence, he urged the government “to take initiative in the GST Council to levy a 28 per cent GST on entire value like lottery, betting, gambling or casinos.” He said it is “not an instrument of skill. It is an instrument of chance. Nobody knows who the owner of crypto is. There is no intrinsic value, no underlying value. It is neither security, nor commodity; so, it is not an asset and even if it is an asset, it should be treated like gold”.

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