On March 28, BJP’s Rajya Sabha member and former Deputy Prime Minister of Bihar Sushil Kumar Modi requested the government to raise the tax rate on cryptocurrencies from the current 30%. Germany, France and Austria impose 40-50 percent tax on it. In an exclusive interview with Outlook Money, he shares his views on cryptocurrencies and blockchain. Edited excerpt:
Q: Why do you think the tax on cryptocurrencies and digital assets should be above 30%?
Ssilk Marmodi: The main reason is that I believe cryptocurrencies (trade-in) are pure gambling. Even the government says it’s a completely speculative market, similar to gambling, (buying) lottery, and horse racing. Also, no one knows when this bubble will burst, and millions of people will be financially ruined, so we want to discourage the industry. That’s why the government maintains this 30 percent (tax) slab. However, some countries, such as Japan, have been found to maintain 40 to 50 percent of slabs. I think the code is like cigarettes and liquor. As the government faces problems with crypto classification, I create new slaves for them so that the government can make money and discourage people from investing in this volatile asset. Requested to impose a lot of taxes.
Q: What do you think about GST (Goods and Services Tax) for cryptocurrencies?
Modi: Currently, there is no specific GST for cryptocurrencies. It’s only 18 percent in exchange as they serve. Therefore, for that particular service, you need to provide the GST that is already defined. However, if you look at sectors like gambling, you’ll see GST throughout the transaction. For example, if you buy a lottery ticket for 100 rupees, you will have to pay 28% more. If you bet 1 rupee at the casino, you will have to pay 28,000 rupees as GST, apart from the tax to the service provider. There should be a tax on the entire transaction amount.
It is now the responsibility of the GST Council to impose taxes on the entire transaction, just as it imposes a 3% GST on gold. Our main motivation is to discourage the crypto industry and the business as a whole.
Cryptocurrency is gambling. GOI needs to rethink and raise the tax on cryptocurrencies from the current 30%.
-Skilmar Modi, BJP Bihar pic.twitter.com/44lBmekTej
— CryptoIndia 🔑 (@CryptooIndia) March 28, 2022
Q: Parliamentarian and Lok Sabha MP Gaurav Gogoi says the government is giving various signals about India’s cryptocurrency. Why doesn’t the government clarify cryptographic regulations?
Modi: This subject is so complex that it cannot be clarified immediately. The government is discussing this issue with the IMF (International Monetary Fund), the World Bank and others, and hopes to issue a consultation soon. The government is not willing to make a rush decision because this technology is new to all of us.
Today, the industry is in turmoil around the world, whether or not it is banned. How to approach regulations, etc. We need to have a common view of this new technology. Overall, it’s gambling. There is no intrinsic value behind this new technology. It’s based solely on code, unlike traditional assets like gold that introduce something to people.
Q: Does it curb innovation and motivate young people?
Modi: Are “.com” and “Internet” the same? We are not discouraged by the blockchain technology on which this cryptocurrency is based. There are several possibilities for blockchain (usage) such as land records, health records, counts, etc. There are no cryptocurrency advantages in this country. I urge young people in this country not to go to cryptocurrencies.
We also gave small investors enough time to withdraw their money and withdraw from the industry.
Q: Is it necessary to ban cryptocurrencies in India?
Modi: I don’t want to comment on whether cryptocurrencies should be banned. It’s a problem that needs more discussion and we have to wait for a while. But if the government bans cryptocurrencies, it won’t work in India and the KYC norms won’t work. That way, whatever happens (transactions), they are all illegal. “Effective ban” is also important.
Cryptographic mining is very difficult in India. Countries with horrific economies, such as El Salvador and Ukraine, have legalized it. (Overall, a) Introducing cryptographic regulations is not easy.
Q: According to the crypto industry, 1% TDS is very high.
Modi: 1% TDS is not a burden. It can be adjusted later. It (TDS) was imposed to track the number of investors. Overall, as I understand it, the government wants to discourage young people from crypto (investment). We want to prevent people from jumping into this cryptocurrency directly.