The central government has announced the imposition of taxes in the highest slab for digital assets such as cryptocurrencies and NFTs to dissuade people from investing in them due to their highly speculative and volatile nature, as stated by Rajya Sabha lawmaker and BJP leader Sushil Modi in Parliament on Tuesday.

Modi also expressed concerns about the use of cryptocurrencies and urged the government to apply GST to the entire transaction of such digital assets.

During the Zero Hour, the BJP leader raised the issue and referenced the Finance Minister’s announcement while presenting the 2022-23 Budget on February 1.

The Budget last week proposed a 30% tax on virtual assets, effectively legitimizing the trading of private cryptocurrencies and NFTs.

According to the BJP MP, virtual digital assets have been taxed in the highest slab without any exemptions to discourage investment due to their speculative and volatile nature. He emphasized that cryptocurrencies have no intrinsic value and called for GST to be imposed on all transactions.

The MP highlighted that the government currently only levies 18% GST on services provided by crypto exchanges, treating them as financial services, despite cryptocurrencies being similar to activities such as lottery, casinos, betting, and gambling, which have a 28% GST rate.

He further pointed out that even gold incurs GST on the entire transaction value, and urged the government to propose a 28% GST rate on the entire value of cryptocurrencies in the GST Council, likening them to lottery, betting, gambling, or casinos. He argued that cryptocurrencies are based on chance, lack intrinsic or underlying value, and do not fit into traditional asset categories like securities or commodities, suggesting they should be treated similarly to gold.