How profit from Bitcoin will be taxed in India?

How profit from Bitcoin will be taxed in India?

Bitcoin is the buzzing word on social media and all want to become rich by investing in the crypto currency. Many Indian despite RBI warning has invested in to Bitcoin few months back and have made handsome gains. The question now remains is the gains on sale of Bitcoin is taxable under Income Tax Act? If yes then it shall be taxed as business Income or Capital Gains or something else ?

Any gain on Bitcoin is taxable as any gain on account of Bitcoin exchange is certainly (100%) taxable because the definition of income u/s 2(24) under Income Tax Act is inclusive, which mean every kind of income unless clearly exempt .

When will Bitcoin Tax Liability Arise

The buying and holding of Bitcoin wont attract any Income tax liability. The selling of Bitcoin will lead to profits or gains which will be considered as Income and taxed in India

Speculative Income

This is debatable on account of lack of any law related to taxation of Bitcoin in the Income Tax Act . It will be determined on the basis of each facts and circumstances. In case of trading it will be considered as speculative income and will attract tax as per slab rate of Individuals.

Capital Gains

If the transaction are not frequent and are in nature of Investment in the currency, it would be classified as capital gains and would attract either long-term capital gain tax or short-term capital gain tax, depending on the holding period. Long-term capital gains tax will be taxed at 20% if Bitcoins were held for at least 36 months. In all other cases, short-term capital gains tax at 30% would be applicable

RBI warning

RBI issued fresh warnings, reminding investors that it has not authorised any entity to deal in Bitcoins and that any investor or trader dealing with virtual currencies “will be doing so at their own risk”.

Bitcoin sale by Non Resident

Income from sale of Bitcoins earned outside India and received outside India will not be taxable in India if you qualify as non resident or resident but not ordinarily resident in India. Subsequent remittance of the said income will also not be taxable in India. But since the issue is not a settled concept, there can be possible litigation with the tax authorities on this issue.

Advance Tax and Future

Advance tax deadline is on December 15, Bitcoin investors and their consultants are trying to figure out a way to deal with the returns on Bitcoin investment along with other cryptocurrencies. We can expect some clarity once the Finance Ministry finalises its opinion on a report on virtual currencies that was submitted to it recently. It would be interesting to see if GST will be applicable or not? Only future has answer to it.


GST Network Rolls Out New Facility For Exporters To Claim Refunds

The Goods and Services Tax Network (GSTN) said on Sunday that it has introduced a utility Table 6A in the Form GSTR-1 used by exporters to claim refunds.

“Table 6A of Form GSTR1 has been introduced on the GST portal,” GSTN said in a statement.

Table 6A of Form GSTR1 allows taxpayers to file export related data for the period concerned that permits processing of the tax refund on the basis of declaration made under Form GSTR 3B and Table 6A of GSTR-1.

An exporter can claim refund of Integrated GST (IGST) paid at the time of export by filling the details of the shipping bill and tax paid GST invoice in his Form GSTR1 in the relevant month.

The shipping bill filed by an exporter with customs authorities is considered to be an application for refund of the integrated tax paid on the goods exported out of India.

The GSTN said that this functionality has been made available to enable exporters to file for refund as the dates for filing of GSTR-1 for August onwards have not yet been notified and the form has not been filed.

“Every registered taxable person who has made exports on payment of IGST, other than an input service distributor or compounding taxpayer or TDS deductor or TCS collector can file Table 6A of Form GSTR-1 electronically on the GST Portal” GSTN Chief Executive Prakash Kumar said.

The table can be filed from the returns section of the GST Portal.

The refund amount would be paid either through a credit to the exporter’s bank via ECS or by cheque.

In a relief to exporters, the government last month had announced that it would immediately refund exporters for the month of July and August through cheques from October 10 and October 18, respectively.

Following a meeting, the GST Council decided that this would be an interim relief, and as a long term measure e-wallets will be created for all exporters by April 1, 2018, to carry forward the refund process.

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Infosys deploys more people in states to ease GSTN load

Facing criticism over glitches in the software it developed for the GST Network, InfosysBSE 0.41 % Ltd has deployed more IT experts and engineers in states to steady the Goods and Services Tax return filing portal, a government official said today.

Infosys, which had won the Rs 1,380 crore deal in 2015 for developing and running GST’s back-end, has stepped up efforts to remove outages the system faced during peak tax and return filing period, he said.

“Infosys has started deploying more engineers and IT experts for the GSTN project. They are being sent to major states to address issues and help states better understand the system,” the official said.

Businesses and traders have complained of problems faced in filing of return on the GST-Network portal on the last days, forcing the government to extend deadlines.

While it had extended the date for maiden GSTR-3B return filing in August, the due date for final returns GSTR-1, 2 and 3 has also been extended.

Glitches in invoice matching while filing GSTR-2 was flagged at the meeting of Group Of Ministers (GoM) on October 28 following which it directed Infosys to deploy more software engineers in every state to assist state tax officers with the new IT system.

The official said Infosys has already deployed more than 100 IT people in their team for GSTN functioning.

Bihar Deputy Chief Minister and head of GoM on GSTN Sushil Modi had last week said that Infosys was earlier asked to deploy engineers in major states by October 30.

“They have done so in 9 states and sought time till November end to deploy in other states,” Modi had said.

Infosys won a 5-year government contract worth Rs 1,380 crore in 2015 to develop the IT system for the biggest indirect tax reform GST.

While some believe that the onus was on Infosys to ensure a glitch free system, others say that the last moment finalisation of rules relating to returns took toll on the system’s performance.

The GST Council, comprising Centre and states, had in June finalised rules for return filing and transition credit claims.

GST was rolled out from July 1. GST Network has since then been working very closely with Infosys to ensure timely availability of software and utilities on the portal.

Replying to questions emailed by , Infosys said: “Given the complex nature of the project and rapid change management, there have been several stakeholder concerns that have also been raised.

“Some of our finest engineers are supporting the GSTN team as they work towards resolving these and serving all stakeholders”.

The GoM on GSTN chaired by Modi was set up in September to streamline the issues faced by businesses while transacting on the portal and also to make it more user friendly.

After the third meeting of the GoM on October 28, he had said: “27 functionalities had to be launched or issues had to be resolved by Infosys, out of which 18 of them have been operationalised. This is about 66.7 per cent success. Infosys is doing their best…” JD SR ANZ SA
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Infosys is to blame for GST Network glitches, say government officials

NEW DELHI: InfosysBSE 0.47 %, for long the face of India’s software sector, finds its management of the GST information technology backbone under scrutiny at the highest levels of the government. It had won the Rs 1,380-crore deal for developing and running GST’s backend in 2015.

Three top government functionaries expressed strong disappointment with the company over frequent glitches that have beset the Goods and Services Tax Network (GSTN), leading to extension of deadlines for returns several times.

“It has been a disappointing experience,” said one of the officials, adding that the software provider is now expected to improve service delivery.

Infosys rejected the contention that its work had been regarded as unsatisfactory. “The information you have received is completely inaccurate,” the company said in an email to ET.

The government on October 30 again deferred filing of GSTR-2 for July to November 30 from October 31 and GSTR-3 for July to December 11 from November 10. GSTR-2 for July was to be originally filed in August.

What has irked some sections in the government is the time taken for the company to respond or come up with solutions to problems.

“While the long-term problem we face is inculcating a culture of tax compliance, the short-term problem is on account of Infosys,” said the official, expressing frustration with the jargon-laden response it usually got.

Senior finance ministry officials have been regularly interacting with the company’s top brass, both during the tenure of former CEO Vishal Sikka and the new dispensation under non-executive chairman Nandan Nilekani, to help find fixes quickly. Apart from this, there have been instances of offline utilities being introduced only a day ahead of the actual filing date or these not having all the elements needed.

GSTN’s functioning was one of the key issues flagged at a September 9 meeting of the GST Council in Hyderabad, leading to the formation of a group of ministers (GoM) under Bihar finance minister Sushil K Modi.

“They (Infosys) should have been more responsive,” said an official. The government expects things to improve with the high-level GoM having direct oversight of the IT systems. Modi has called a meeting to seek suggestions from stakeholders on how to improve GSTN functioning on November 1 in Patna.

Infosys said it had been working hard to resolve glitches quickly.

“Given the complex nature of the project and rapid change management, there have been several stakeholder concerns that have also been raised,” Infosys said in its email. “Some of our finest engineers are supporting the GSTN team as they work towards resolving these and serving all stakeholders.”

Several taxpayers including trade bodies have said the system is prone to slowing down to a crawl, generating error messages and crashing.

“This has led to restlessness among the businessmen… A small businessman can’t spend so much time on filing of returns,” said a trader.

The IT service provider has assured the GoM that it will expand its team to resolve issues with the GSTN but policymakers said they want to see results soon.

Modi said the company had responded to feedback, but added that he can only speak for the period since he became part of the council and the GoM in September.

“They have speeded up things… They have deployed additional manpower,” he told ET. “We must also remember that GST is a big change from earlier tax system of VAT… Besides, the council has also made changes that had to be reflected in the software.”

The company said the GSTN system has performed well.

“Infosys is very proud to be associated with the prestigious GST project which is the largest tax project of its kind in the world,” the company said. “The system has already demonstrated success across several parameters — till date 37 crore invoices have been uploaded on the system while the system is designed to handle 300 to 320 crore invoices every month. Seventy lakh tax payers have successfully migrated to the new system and the country has recorded 25 lakh new registered taxpayers.”

Central and state-level tax regimes have been integrated with all 29 states and seven Union Territories successfully migrating onto this system. In addition, the system is able to manage 100,000 active users and saw peak loads in the last two days of filing returns for July. Half the filings were made in that timeframe and 70% of the collection achieved with just 25% of server utilisation, demonstrating the system’s ability to manage scale, Infosys said.

“Any large project of this scale, especially a transformative one like this has to deal with changes in both policy and stakeholder usability,” the company said.

“Some of these modifications have resulted in rapid changes to the system particularly due to its integration with heterogeneous IT ecosystems including GST Suvidha Providers, Aadhaar, CBEC and Model 1 states.”


GST Portal New functionalities

New functionalities made available on GST Portal (


Following new functionalities have been made available to taxpayer on GST Portal:

  1. GSTR-2 Offline Version 2.1 – New version of GSTR-2 offline tool is available on portal now. This will enable taxpayers to export data of GSTR-2 from Tool to Excel. This will be helpful in comparing this data with purchase register to take actions like accept, reject and modify.
  2. Form GST CMP-02 – Intimation to pay tax under Section 10 (Composition Levy) under Rule 3(2) of CGST Rules, to be furnished by the person for opting to pay tax under Composition Levy, (Refer Notification No. 45/2017 Central Tax Dated 13/10/2017 issued by CBEC).
  3. Form GST CMP-03 – Intimation of details of stock held on the date preceding the date from which the option for composition levy is exercised. Now this form can be filed electronically on GST portal by 30th November 2017, by virtue of Order No. 5/2017-GST Dated 28/10/2017 issued by CBEC.
  4. Form GST ITC-04 – Quarterly Statement to be furnished by taxpayer having details of Goods/capital goods sent to job worker and received back.
  5. Form GST REG-29 – Application for cancellation of provisional registration by the migrated taxpayer, who is not liable for registration under GST. Taxpayer can Login with credentials, click on link “Cancellation of Provisional Registration” at the Dashboard (under view profile), mention reason, sign and Submit. The cancellation will be effective from appointed date.
  6. Form GST PMT-07 – “PMT-07 Grievance for payment”, application for intimating discrepancy relating to payment is available on Portal. This functionality is meant for the taxpayer to raise grievance when the amount is debited from his account, but their Electronic Credit Ledger is not updated.
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GST Network launches an offline tool to file a form detailing inputs or capital goods sent to job workers and received back

GST Network today said it has launched an offline tool for businesses to quarterly file a form detailing inputs or capital goods sent to job workers and received back from them.

The excel-based offline tool has been made available for preparing and uploading the statement in form GST ITC-04. The tool can be accessed at Download section of GST portal, GSTN said in a statement.

As per GST (Goods and Services Tax) Rule 45, details of inputs or capital goods sent to job worker and received back from them need to be furnished on a quarterly basis in ITC-04.

“All the details can be added in offline mode and thereafter uploaded on GST portal to furnish the form for the quarter July-September 2017,” GSTN CEO Prakash Kumar said.

With the offline tool, internet connection is not required at the time of filling up details. After the details are fed into the excel tool, it can be uploaded on the GST portal.

Also since most of the data entry and business validations are in-built in the offline tool, it reduces chances of errors at the time of upload to the GST portal.

Also the data uploaded will be available for editing or for making new additions.

After the file is uploaded, the system will show the summary of data uploaded, which needs to be digitally signed or verified through EVC (electronic verification code) for successful filing of the same.

A principal manufacturer sends semi-furnished goods to job workers to further process the product.

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High GST, cess force Toyota to stop producing hybrid Camry at Bengaluru plant

The impact of the new Goods and Services Tax (GST) regime and attendant cess have prompted Toyota Kirloskar Motor to stop producing the hybrid Camry at its manufacturing site in Bengaluru, the company told Economic Times.

 The Camry was previously in heavy demand but sales fell significantly after a GST of 28 percent and attendance cess of 15 percent led to a sharp increase in price from Rs 32 lakh to Rs 38 lakh. Car sales witnessed a 73 percent drop comparing to the previous year.

According to the report, the Bengaluru assembly line stopped producing the Camry at the end of September. As of now, Camry is still being sold as the car’s inventories haven’t completely dried up as yet.

“We don’t have a business case to persuade our parent company in Japan to step up investments on hybrids in Bengaluru, given the punitive tax structure,” Toyota Kirloskar Motor Vice Chairman Shekar Viswanathan told the paper.

 Earlier, Karnataka’s Industries Minister RV Deshpande requested Finance Minister Arun Jaitley to levy the same GST rate on hybrid and electric vehicles. As of now, electric vehicles attract 12 percent GST rate.

Camry is a ‘strong’ hybrid, which can run in purely electric mode, while a ‘mild’ hybrid can’t.

Currently, Toyota has 34 hybrid models. “We wanted to assemble more hybrids that behave like an electric vehicle,” Viswanathan said. He added that internal combustion engines were only installed to reduce consumers’ anxiety.

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Multiplex industry has got the wrong end of the stick in GST: Ajay Bijli

Ajay BijliChairman and managing director, PVR Ltd talks to Moneycontrol about the multiplex business, impact of GST on entertainment, competition from digital content and their new privilege programme.

Edited excerpts:

Rapid advancements in technology and digital offerings have brought about sweeping changes in the world of media and entertainment. How has it affected your industry and what’s your prognosis like?

Currently, the given the big budgets of the films—both international and domestic—film makers want to make something big with special effects, larger-than-life story telling formats, big actors and other similar varieties. So, the only way they can recoup the value is through theatrical release. About 60-70 percent of the revenues of a movie still come from theatrical release. Theatrical release gives you that stamp or that cache once the film has done well to go ahead with other formats on which the movie can be released and can be monetised. So, while smaller movies can get released on these new platforms, the big banner productions will continue to need big screens.

Your luxury offerings come between Rs 1,000 and Rs 2,000. Are there takers for these services, particularly at a time when people wait for a film to be available on Hotstar and Amazon Prime and can easily delay watching a new release at the theatre?

What we are very careful about is the kind of experience we are offering to our consumers, and how it is completely different from any other platform. Also, the Indian consumer does not like anything that is obsolete. They want newer experiences, the best and the latest technology and also good services. That’s where our forte is. We make all of this available to the Indian consumer who still like to go out. We are getting close to 80 million people this year, and fortunately we get people to come back to us. Movies will keep being made. All we have to do is provide an infrastructure where it can be enjoyed. The people who visit us pay for the experience they get at our properties.

In the last 12 months there has been two big events—demonetisation and GST—that have impacted the industry. Do you think these are now behind you or there are still a few things that needs to be sorted out?

While the movies that came in between demonetization all went for a toss, but we have recovered from that. GST is something where we got the wrong end of the stick. Clubbing us with casino and luxury category should not have been done. We are making representations to the government we are trying to tell them that if 2.5 billion tickets get sold in India at a price point of less than Rs 100 then how can it be called luxury?

All over the world ticket prices are not even taxed and even if they are it is not more than 18 percent to 20 percent. Blended entertainment tax was also close to 19 percent. The argument that in GST one has to pay something very similar to what they were paying earlier, therefore, doesn’t hold true. It is only Delhi and Mumbai who paid 40 percent is now paying 28 percent, rest of the places across India were paying only about 10-15 percent. Also, at a macro level, India is a country that is grossly under screened. America has got 40,000 screens; 5000 are being added in China annually, whereas in India, only 300 screens are being added every year and 500 screens are closing down (annually). The 28 percent GST is only worsening the situation.

How much of a threat are players like Netflix and Amazon Prime?

Netflix is creating content but that is where we get differentiated. Netflix is showing old movies, their own content and a lot of TV programmes. While I understand that there are people who are glued to shows like House of Cards and we are losing some customers there, we get to exhibit brand new content and people do have a big appetite for it. Like I said, theatrical releases gives one a sort of cache. So, till the window is exhausted we make the most of brand new content.

Having said that, Netflix is creating great content and we would want to become a studio and have the content so that we can play them.

Major operators are all exploring Tier II cities. PVR is present in places like Moradabad and Bokaro and Panipat. How are these properties doing? Are people ready to pay the kind of money a multiplex charges?

It is the right price point that makes the theatre work. We have segmented our organization structure in categories like normal screens and luxury offering and Tier II and Tier III markets. We provide what a catchment area needs. We already have 600 screens across categories and we will open wherever we see an opportunity.

We are present in Tier II cities like Ujjain, Raipur, Bilaspur, Moradabad and we have more theatres coming up in places like Malegaon and others. We have an outlook to open at least 65-70 screens this year.

Tell us a little about your privilege membership programme.

PVR Privilege is a new initiative from PVR Cinemas, which has been at the forefront of constantly reinventing the movie watching experience in India. This program would function as the platform to power various marketing and promotional efforts and provide movie-lovers across the country with more reasons to keep coming back to PVR. With the membership on earns reward points on movie tickets and food and beverage. Then there is automated conversion of reward points into vouchers that can be used to pay for tickets and food. Members get personalised offers, and services at cinemas alongside also getting bonus points during special occasions.

Movie watching experience these days are also about F&B and retail. You have a shushi bar, a lounge facility and a premium dessert shop too. What’s next?

We are innovating on food every day. We are looking at the healthy aspect of food and what we have started at our Promenade property should soon be extended to other facilities too. We have healthy finger food, juices, protein shakes, baked fries and a host of other options. We are also looking at curating special kid-friendly menus with lot of dairy based products in the offerings.

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Jogen Chowdhury seeks GST exemption for art

Chowdhury, who is a Trinamool Rajya Sabha MP and one of the biggest names in contemporary Indian art, wrote that it was shameful that artists who receive no benefits from the government have been reduced to the category of a businessmen or traders.

Artist Jogen Chowdhury, who curated Rashtrapati Bhavan’s art collection and is a member of a committee that decides on statues and paintings in Parliament, has written to Prime Minister Narendra Modi, Finance Minister Arun Jaitley and the GST Council seeking exemption for art under GST. Chowdhury, who is a Trinamool Rajya Sabha MP and one of the biggest names in contemporary Indian art, wrote that it was shameful artists who receive no benefits from the government have been reduced to the category of a businessmen or traders.

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Original works of art have been taxed at 12 per cent in the GST law and Chowdhury, who is also planning to raise the matter in the Rajya Sabha, said it neither does justice to creativity nor seems to take into account the fact that this amounts to double taxation as artists are already paying income tax on the sale of their work.

“Given that the overall turnover of the total art market would not even cross Rs 500 crore, it hardly qualifies as a commodity in today’s economy…. We, already paying our income tax as honest citizens, demand to be exempted from any form registration or payment of GST,” reads the letter that several artists have signed.

An art work of Chowdhury is estimated to cost Rs 8-10 lakh. A few years back, one of his paintings done during his stint at Rashtrapati Bhavan in the 1970s sold for Rs 3 crore at an international auction. According to publicity material prepared by the government on GST: “Sale of goods or services even as a vocation is a supply under GST.”

Chowdhury said: “It is unfortunate that the government thinks that my creation is just one of many ‘goods’. No other creative activity has been thus taxed. Also most of the expensive paintings sold in auctions are of dead artists — prices go up when an artist dies because then his or her work becomes finite, there is nothing new being created. Living artists at the most make a Rs 50-100 crore market. To be burdened with GST on top of that is a blow. How will we even compete with China, where the government proactively encourages art, if we are to shackle artists like this.”

Artists, he explained, earn from their work only the first time they sell it. Subsequently, the profits go to collectors and auction houses.
Actor Dev, who is a Trinamool Congress MP, has written to Jaitley asking for regional films to be brought under the lowest GST slab of 5 per cent, instead of 18 per cent, where it currently is.


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