India may not be charging a 2% equalization levy on crypto investors. Finance Minister of India, Nirmala Sitharaman was responding to a query by the deputy chief minister of the eastern state of Bihar about data concerning crypto exchanges and their investors in the country. Sitharaman noted that the current administration did not collect any such information.
Earlier reports stated that the tax department was analyzing whether the equalization tax will be applicable on the purchase of digital assets from overseas exchanges. This was because the country has expanded the scope of the tax levy in 2020 to cover ‘e-commerce supplies or services.’ This expanded the scope beyond online advertising and did not exempt business-to-customer transactions.
However, according to Sitharaman, the equalization levy on crypto exchanges may not apply to investors.
Additionally, Sitharaman disclosed that the Finance Ministry did not receive any information on these exchanges’ involvement in drug trafficking or other forms of money laundering in the country. Enforcement Directorate [ED] recently issued a notice to WazirX, one of the prominent exchanges in the country, for violating the Foreign Exchange Management Act [Fema].
Meanwhile, the cryptocurrency exchanges were now marching together to advertise their products in the country. Exchanges like WazirX, CoinSwitch Kuber, and CoinDCX have previously landed in trouble with regulators for not providing sufficient warning about the risks involved in crypto trading. However, now the Blockchain and Crypto Assets Council [BCAC] was set to introduce a new set of guidelines to determine the proper means of advertising through online platforms like Netflix, Amazon Prime, Disney+Hotstar, and others.
According to Navin Surya, who is on the advisory board of the crypto council, the advertising guidelines will make a part of a self-regulatory framework already in the works.