During the Zero Hour discussion in the Rajya Sabha on Tuesday, BJP leader Sushil Modi raised the issue of crypto currencies. Notably, Finance Minister Nirmala Sitharaman had announced during her Budget speech last week that transfer of digital assets, including crypto and non-fungible tokens (NFTs), will be taxed at 30 per cent.

Modi said on Tuesday that virtual digital assets and crypto have been taxed at the “highest slab of tax” at 30 per cent “and that is without any exemption”. This has been done, he said, “to dissuade people from investing in crypto because it is highly speculative and volatile. The tax treatment is similar to betting but there is no clarity regarding levying of GST.”

He said that while the government levies 18 per cent GST “only on service provided by the crypto exchange and is treating it as financial services but cryptos are similar to lottery, casinos, betting, gambling, horse racing, which have 28 per cent of GST and that is also on the entire value, on the entire transaction.”

On gold, he said, the GST is levied on the entire transaction value, and with respect to shares, too, there is a transaction tax on the entire value.

Hence, he urged the government “to take initiative in the GST Council to levy a 28 per cent GST on entire value like lottery, betting, gambling or casinos.”

He said it is “not an instrument of skill. It is an instrument of chance. Nobody knows who the owner of crypto is. There is no intrinsic value, no underlying value. It is neither security, nor commodity; so, it is not an asset and even if it is an asset, it should be treated like gold.”