Blockchain technology in gst
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Blockchain technology in gst
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- British Technology Company Great Mountain Launches Digital Gold Token Economic System
- Why should India not use blockchain for recording Goods and Services Tax (GST)?
- Tax law trailing behind Bitcoin
- GST probe may set precedent for crypto taxation
- After WazirX, DGGI crackdown on Coinswitch Kuber, CoinDCX, BuyUCoin and Unocoin
- GST and Blockchain- Great! But first, a word from Devil’s advocate
- Blockchain technology and its applications in India
British Technology Company Great Mountain Launches Digital Gold Token Economic System
Even as there is no complete legal backing for cryptocurrencies, including Bitcoin, in India, they are gaining popularity in the country. Through a circular in , the RBI had advised all the entities regulated by it not to deal with virtual currencies or provide services for facilitating any person or entity in dealing with settling them. Since then, cryptocurrency has been one of the most talked-about investment options. But there are fears that the government may legally ban the virtual currencies being traded right now.
Officially, the government does not consider cryptocurrencies as legal tender. The Finance Minister, however, said that the Government would explore the use of blockchain technology proactively for ushering in a digital economy.
Notwithstanding the legal status of crypto, or virtual currencies, individual investors across the country are excited about its prospects. To give them a clear picture, we talked to some experts for insights on risks, safety, legal status, and expected future of cryptocurrency in India. It has been around for over a decade and withstood two global recessions.
Traditionally, investors used gold to hedge against stock volatility. But today, crypto is slowly emerging as a mainstream investment class especially among millennials. It is true that it is not illegal to buy cryptocurrency in India. However, there is no legal guarantee of the safety of the invested amount like regular investment avenues. The virtual currency is not guaranteed by the Central Government, so, in order for any virtual currency to be declared legal tender, it will have to be expressly guaranteed by the Central Government.
In that case, parties are legally bound to accept it as a mode of payment. Dubey said the government has cautioned people about the risks in dealing with virtual currencies stating that virtual currencies are not a valid legal tender in India and even made clear that virtual currencies do not have regulatory protection in India. The RBI had also cautioned about the potential financial, operational, customer protection and legal risks associated with virtual currency.
Shetty believes that over the next few months, we will see crypto go mainstream faster with more retail investors, and first-timers entering the market. If you want to start investing in cryptocurrency even after knowing all the risks, Shetty suggests that as a first-timer in crypto, the most important thing you should bear in mind is that that crypto is a high risk, high reward investment option.
Shetty said that as of now, there is no crypto regulation in India. However, buying Bitcoin is absolutely legal in India. He said that there was a banking ban between July — March due to which cryptocurrency exchanges were not able to hold bank accounts. However, the Supreme Court of India quashed the banking ban in Dubey said that the Department of Economic Affairs, Ministry of Finance had constituted a committee to study the issues related to virtual currencies and propose specific actions to be taken.
This committee presented its Report dated February 28, recommending prohibition of all private cryptocurrencies, except any virtual currencies issued by the state.
However, it will support and use underlying cryptocurrency technologies. According to Shetty, the RBI ban was an under-researched and arbitrary move. Bitcoin is slowly emerging as a mainstream investment class especially among millennials. Majority of WazirX users are below 30 years of age. The youth is looking at crypto as an alternate investment option, and increasingly participating here. Bitcoin is labelled as digital gold by many, and is also seen as more superior to gold in several respects.
It offers a high degree of accessibility, allowing anyone to send and receive Bitcoin in a permissionless way. Dubey said that Bitcoin has generated a lot of curiosity amongst the youth in India. The support to the usage of cryptocurrency extended by the IAMAI has also been a major factor in securing popularity. He further said that the startup sector in India is particularly fond of cryptocurrencies since they facilitate cross border transactions with ease, which provides a lot of opportunities to small and medium enterprises to expand their presence across the global market.
Dubey said that in India, the regulators and governments have been sceptical about the virtual currencies and are apprehensive about the associated risks. Slowly, more and more people are becoming aware of crypto, and wanting to pursue a career in Blockchain. Positive regulations will give a big push to crypto adoption in India with more startups building projects on blockchain.
The future is exciting! Like us on Facebook and follow us on Twitter. Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates. Home Money Investing in Cryptocurrency? Risks, Safety Legal Status, Future in India — All you need to know Cryptocurrency: Because of the factors like inherent security, lower transaction fees, lack of interference from the banking system, easy access and use, and universal recognition, it is gaining grounds in India.
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Why should India not use blockchain for recording Goods and Services Tax (GST)?
Crypto wallet and exchange are platforms where merchants and consumers can transact with digital assets like bitcoin, ethereum, ripple, etc. LTD," sources said. Official sources further said, "They are providing facilitation intermediary services for buying and selling of crypto coins. These services attract GST rate of duty of 18 per cent which all of them have been evading. Another official source, who was part of this search, told ANI, "These service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax.
Tax law trailing behind Bitcoin
No, we are not hardened naysayers. Not — when it comes to technology-led progress. Specially as GST rounds off one year and able minds are suggesting how we need a complete and totally transparent audit trail as well as assessment of transactions and their chain of sources in real-time- by using blockchain. Incidentally, way back in May , a report from OECD also talked of emerging technologies that could be best used by tax administrations; and here, the problems of the scale and detail of data that is required by tax authorities was also dwelt upon. This is a real issue, more so when we see how front office systems are generally information-oriented or department-led and not, necessarily, compliance-oriented. But can we do that with moth-eaten systems? If we look at a PWC UK report too, we can pin our hopes on Blockchain readily suiting transactional taxes, such as VAT, withholding tax, stamp duties and insurance premium taxes. It also admits that blockchain is not the cure all for the tax systems, even if it could be applied in some areas to reduce the administrative burden, to collect tax at a lower cost and in cutting VAT fraud. A Deloitte report, on the other hand, looks into examples like SAF-T in Europe or real-time electronic invoicing in South America; cites how at the World Economic Forum in Davos in , the expectation of tax administration and blockchain coming together was slated at as far as around or
GST probe may set precedent for crypto taxation
We felt compelled to write this response to caution against the adoption of such shallow and misleading proposals, seemingly generated out of a comprehensive misunderstanding of blockchain technology and its applicability in solving socio-economic problems. With only 10, full nodes, the Bitcoin network takes up to 10 minutes to process a single transaction, since creating a block requires solving a time-consuming math puzzle and all nodes must agree that the transactions in a block are valid transactions. The Bitcoin network as a whole processes between kk transactions every day, with each transaction consuming about units of electricity , approximately the same as the electricity consumption of the average Indian household in a year, according to data. So, once we put the GST on the blockchain, as the authors suggest, we will be able to enjoy the added convenience of having to wait several minutes to process each one of the lakhs of invoices processed in India on any given day and make the sweltering Indian weather hotter still with all the heat and CO2 emissions generated by the system. Second, the authors present a view of blockchain that makes sense only if we consider all blockchains to be permission-less and public.
After WazirX, DGGI crackdown on Coinswitch Kuber, CoinDCX, BuyUCoin and Unocoin
Normally once a GST registration is obtained, the trail of entire taxpayers transactions of a GSTIN is of utmost importance for enforcement, assessments related activities. The vital information such as Registration, Amendments, Payments, Ledgers, Annual Returns of Taxpayers forms the basis for assessments to ascertain that appropriate Tax is paid in time and no dues, penalty is applicable to Taxpayers. All returns filed by Taxpayers are normally self-assessed, but the Tax enforcement authorities need to ensure that all liable tax is paid to Government in time. It is also very important that essential information of Taxpayer assessments and orders passed is available readily till date to complete an assessment. Any enforcement activity requires ready availability of authenticated, immutable records pertaining to the tax payer. In order to have this essential taxpayer information as authenticated, immutable, tamper free, Blockchain is the only suitable technology through which the desired objective can be achieved.
GST and Blockchain- Great! But first, a word from Devil’s advocate
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Blockchain technology and its applications in India
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November 28 The global indirect tax leader of another Big 4 accounting firm recently published a blog post entitled 'Indirect tax: Five global trends'. The article outlined five key trends sweeping the indirect tax landscape. They were:.
Australia has generally been regarded as a relatively friendly and stable jurisdiction for blockchain and cryptocurrency businesses to operate in. There has been a proliferation of product offerings from the Australian blockchain and cryptocurrency community, and the Australian approach to the sector has broadly remained supportive of new and innovative financial services and products using or transacting cryptocurrencies. In part, the expansion of the sector in Australia has been led by businesses in the payments, crypto asset, lending, investment and custodial services spaces. To date, the Government has taken a largely non-interventionist approach to the regulation of cryptocurrency, allowing the landscape to evolve at a faster rate without significant regulatory limitation. Such growth remains a priority for the Government, emphasised by its Select Committee on Australia as a Technology and Financial Centre publishing its third issues paper in March , having amended its scope of matters to include opportunities and risks in the digital asset and cryptocurrency sector. Although the RBA has been involved in numerous projects to explore the potential use and implications of a wholesale central bank digital currency CBDC , it maintains that there is currently no public policy case to issue a retail CBDC.