India mulls bitcoin tax

Agencies and Eurus Yiu

The Indian government is weighing a proposal to impose 18 percent goods and services tax on bitcoin transactions, estimated to be about 400 billion rupees (HK$42 billion) annually, reports the Times of India.

The Central Economic Intelligence Bureau, an arm of the Indian finance ministry, has put forward the proposal to the Central Board of Indirect Taxes and Customs, suggesting public coffers could potentially get 72 billion rupees annually on bitcoins trading.

The newspaper quoted sources as saying the bureau has suggested that bitcoins can be categorized under the "intangible assets" class and a goods and services tax levy could be imposed on all transactions.

The board has suggested that the cryptocurrency can be treated as current assets and the tax charges on the margins made in its trading.

Early this year, the Indian Supreme Court lifted a two-year ban imposed by the Reserve Bank of India on banks and financial institutions to deal with digital currencies.

There are mixed views on Bitcoin. Mark Newton, who has been bullish on the cryptocurrency, warned investors to sell within one to two weeks although most investment houses pointed out that it has become a mainstream investment vehicle.

Given that Bitcoin has just hit a record high, Newton said it is still quite bullish on an intermediate-term basis. But he predicted that bitcoins may peak next month.

Meanwhile, cryptocurrency exchange Coinbase said it would suspend trading in cryptocurrency XRP after US regulators last week charged associated blockchain firm Ripple with conducting a US$1.3 billion (HK$10 billion) unregistered securities offering.

The Economic Times said the firm is preparing for a stock market listing and has applied to the US Securities and Exchange Commission to go public.