Having tested $8,000 last week, and bounced, Bitcoin has broken back below it – to six-week lows – as the entire crypto-space is under pressure following China crackdown headlines and news that India is considering a major crypto tax.
image courtesy of CoinTelegraph
It’s a sea of red across cryptos…
So much for Blockchain Week…
And the entire cryptospace is accelerating lower…
While it is never clear what the driver of price action is, news from China and India appear to major potential catalysts in the last 24-48 hours…
CoinTelegraph reports that India is working on proposals to make cryptocurrency transactions subject to goods and services tax (GST), sources told Bloomberg May 23.
According to the anonymous parties with “direct knowledge” of the plans, the government’s Central Board of Indirect Taxes is considering applying the 18 percent tax to exchange operations, which it would view as “intangible goods.”
“Purchase or sale of cryptocurrencies should be considered as supply of goods, and those facilitating transactions like supply, transfer, storage, accounting, among others, will be treated as services,” the publication reports in a summary.
India has so far refrained from issuing regulations on cryptocurrency, despite efforts by its central bank to reduce the ability of businesses and citizens to interact with them.
In April, the Reserve Bank of India formally forbade domestic institutions from servicing cryptocurrency businesses in a move which has so far failed to curb the proliferation of new exchanges.
If the taxation rule goes ahead, it would signal a move towards legitimacy of the industry in the continued absence of hard-and-fast legislation.
“If buyers and sellers are in India, the transaction would be treated as a supply of software and the buyer’s location will be the place of supply,” Bloomberg continues, noting elsewhere that: “Transactions beyond the Indian territory will be liable for integrated GST, and would be considered as import or export of goods. IGST will be levied on cross-border supplies.”
The move is not the first targeting taxation of cryptocurrency in India. In February, letters were sent to around half a million traders demanding they report profits on exchange activities.
Meanwhile, CoinTelegraph notes a new report issued by China’s Ministry of Industry and Information Technology, reiterated the Chinese government’s concerns about “certain risks that cannot be ignored” in regards to ICOs, pyramid schemes, and fraud, with a new government-led study detecting 421 fake cryptocurrencies in China’s crypto space.
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