India Tax Overhaul and Cryptocurrency

It seems as part of the tax overhaul, the Modi government is looking in to taxing bitcoin and other cryptocurrency. Some time ago the Indian government announced the creation of an interdisciplinary committee to prepare a report and recommend policies for cryptocurrency. 

The impact of the GST on cryptocurrency remains to be seen. The main question will be whether it is deemed a currency -- which would mean indirect taxes don't apply -- or essentially assets being used for bartering. 

The attraction of the latter option appears to be the relative simplicity. Rather than integrating and regulating bitcoin, it would merely be taxed under the new goods and services tax schema. Cryptocurrencies would be traded like gold, on registered exchanges monitored for illegal activity. The line that is being walked appears to be between blanket legalization with the preservation of the anonymity of distributed ledger cryptocurrencies and blanket illegalization, an unpopular option. 

The list of countries in which cryptocurrencies are illegal is not a long one: Bangladesh, Kyrgyzstan, Ecuador, Bolivia, and a few others. If India opted to illegalize cryptocurrencies, it would be the largest market to do so.