Indian digital asset (crypto) exchanges, including CoinDCX and WazirX, are awaiting clarification from the Reserve Bank of India (RBI) regarding the classification of digital assets, including digital currencies in the country’s tax code. The exchanges need to determine if the assets fall under commodity, currency, goods, or a service. This classification will determine if they fall under the country’s Goods and Services Tax (GST) or any other tax framework.
This comes after the exchanges had secured a victory earlier in the year when the Supreme Court of the country lifted the central bank’s restriction on the banking entities to offer services to digital asset businesses. Following this decision, Indian exchanges were permitted to operate without having to use peer-to-peer trading services to circumvent previous RBI restrictions.
The banking ban was imposed by RBI in 2018, however, the digital currencies were still legally traded in the country – mostly in peer-to-peer exchanges or crypto-to-crypto pairs – as there was no ban on them.