GST on crypto is the most unsettled corner of India's crypto tax landscape. The position has shifted twice in three years; here's what's currently being enforced and what's still under litigation.
What's clearly taxed
Exchange service fees: 18% GST is levied on every fee an exchange charges you. If you pay ₹100 in trading fees, you pay an additional ₹18 in GST.
Foreign-exchange GST notices: in 2023-24, DGGI issued large notices to foreign exchanges (Binance, KuCoin) for 18% GST on the value of trades by Indian users. Most are still under litigation.
What's contested
The DGGI's view in some notices was that crypto is a 'service' and the entire trade value attracts 18% GST. Industry's counter: VDAs are taxed under Income Tax Act 115BBH as a separate asset class, and 18% GST on the trade itself would be double taxation. No final ruling yet from courts or the GST Council.
On P2P specifically, GST has not been actively enforced on the trade between two retail individuals — only on the exchange's facilitation fee.
What you should do
Pay the 18% on platform fees. Track it as a non-deductible cost (since 115BBH bars expense deductions). For now, treat the trade-value GST question as unresolved — your CA's advice will track the latest litigation developments.
Key takeaways
- 18% GST on exchange platform fees — clearly enforced.
- GST on the trade-value itself: contested, not currently enforced on retail P2P.
- Foreign exchange GST notices ongoing, mostly under litigation.
- GST on platform fees is non-deductible against your 30% income tax.
