Key Takeaways
- Individuals buying or selling crypto as investments generally do NOT pay GST on the transaction value. GST applies to the exchange's service fee, not your trading profits.
- Crypto exchanges and trading platforms pay 18% GST on their commission and service charges under SAC 998599.
- Foreign exchanges (Binance, Coinbase) serving Indian users must register as OIDAR service providers and charge 18% IGST with no threshold exemption.
- The Income Tax VDA definition under Section 2(47A) does NOT automatically apply for GST classification. The CGST Act uses its own definitions of "goods," "services," and "money."
- No dedicated CBIC circular on crypto/VDA exists as of July 2026. Most GST positions are derived from first principles of the CGST Act.
GST on Crypto: Exchange Fee is Taxable, Your Trading Profit is Not When you buy Bitcoin on WazirX or CoinDCX, the 18% GST applies to the platform's service fee (0.1-0.5% commission), not on the value of crypto you purchased. Individuals trading crypto as personal investments do not owe separate GST on their capital gains. That is covered by the 30% flat tax under Section 115BBH of the Income Tax Act. (Source: CGST Act Section 2(52), Section 2(75), Section 7; GST Council clarification dated 7 July 2025)
Frequently Asked Questions
Do I have to pay GST when I buy or sell cryptocurrency in India?
No, if you are an individual buying or selling crypto as a personal investment, you do not pay GST on the transaction value. GST at 18% applies only to the service fee or commission charged by the exchange platform. Your trading profits are subject to income tax at 30% under Section 115BBH, not GST.
Is GST different from the 30% crypto tax under Income Tax?
Yes, completely different. The 30% tax under Section 115BBH applies to your capital gains from selling VDAs. GST at 18% applies to the service charges of the exchange platform that facilitates your trade. These are separate levies under separate laws (Income Tax Act vs. CGST Act). You pay the 30% on profits and the exchange pays 18% GST on its commission.
Do foreign crypto exchanges like Binance need to pay GST in India?
Yes. Foreign crypto exchanges providing services to Indian users are classified as OIDAR (Online Information and Database Access or Retrieval) service providers. They must register under GST from the first rupee of revenue (no threshold exemption applies) and charge 18% IGST on their service fees to Indian users under Section 14 of the IGST Act.
The most widespread misconception in Indian crypto circles: "I already pay 30% income tax on my crypto profits, so GST must also apply to me." This is incorrect. Income tax and GST are entirely separate levies operating under different statutes, targeting different events. Income tax under Section 115BBH taxes your profit when you sell a VDA. GST under the CGST Act taxes the supply of goods or services in the course of business or commerce.
For the vast majority of individual crypto investors, GST is not a direct concern. It becomes relevant when you operate a crypto exchange, provide mining services commercially, or run a business that accepts crypto as payment.
This guide breaks down exactly when and how GST applies to every type of crypto and VDA transaction in India.
For the income tax side of crypto taxation (30% flat rate, 1% TDS, Schedule VDA filing), see our detailed guide on income tax on crypto.
Looking for expert help with GST compliance for crypto businesses? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant end-to-end: filings, notices, and advisory, all in one place.
How Cryptocurrency Is Classified Under GST Law
The starting point for any GST analysis is classification. Is cryptocurrency "goods," "services," "money," or "securities"? The answer determines whether and how GST applies.
Crypto Is "Goods," Not "Money"
Under Section 2(75) of the CGST Act, "money" means Indian legal tender, foreign currency, cheques, promissory notes, and any instrument recognised by the RBI as legal tender. Cryptocurrency fails this definition on two counts: the RBI has never recognised it as legal tender, and it is not denominated in Indian or foreign currency.
Under Section 2(52) of the CGST Act, "goods" means every kind of movable property other than money and securities. Since cryptocurrency is neither money nor securities (it is not regulated by SEBI as a security), it falls into the residual category of "goods" - specifically, intangible movable property.
The Madras High Court reinforced this position in October 2025 when it declared cryptocurrency to be "property" under Indian law in the WazirX/Zanmai Labs proceedings, capable of being owned, possessed, and held in trust.
No VDA Definition in the CGST Act
A critical gap in the law: the CGST Act contains no definition of "virtual digital asset." The VDA definition under Section 2(47A) of the Income Tax Act (inserted by the Finance Act, 2022) applies exclusively for income tax purposes. It does not automatically extend to GST. This means GST classification of crypto relies entirely on the CGST Act's own definitions of goods, services, money, and securities.
| Classification | CGST Act Definition | Does Crypto Qualify? |
|---|---|---|
| Money (Section 2(75)) | Indian/foreign legal tender, RBI-recognised instruments | No - RBI has not recognised crypto as legal tender |
| Securities | As defined under Securities Contracts (Regulation) Act, 1956 | No - SEBI does not regulate crypto as a security |
| Goods (Section 2(52)) | Every kind of movable property other than money and securities | Yes - crypto is intangible movable property |
| Services (Section 2(102)) | Anything other than goods, money, and securities | Exchange platform services qualify |
GST on Individual Crypto Transactions
Buying and Selling as an Investor
If you purchase Bitcoin, Ethereum, or any other cryptocurrency as a personal investment and later sell it at a profit, no GST is payable by you on the transaction value. Here is why:
GST under Section 9 of the CGST Act is levied on the "supply" of goods or services "in the course or furtherance of business." An individual buying and selling crypto as an investment is not engaged in a "business" as defined under Section 2(17) of the CGST Act (which requires a trade, commerce, manufacture, profession, or similar vocation carried on continuously or regularly).
Occasional investment activity does not constitute a supply under Section 7 of the CGST Act. Your capital gains are taxed under income tax at 30% under Section 115BBH, with 1% TDS deducted at source under Section 194S. GST does not enter the picture.
When Could an Individual Attract GST?
An individual could trigger GST obligations if crypto trading becomes their primary business activity (trading as a profession, not as a passive investor) and their aggregate turnover from such activity exceeds Rs 20 lakh in a financial year (Rs 10 lakh in special category states). In that scenario, the individual would need to register under GST and charge GST on the value of crypto supplied.
However, this is a grey area. The CBIC has not issued specific guidance on when individual crypto trading crosses the line from "investment" to "business." Taxpayers in this position should obtain professional advice.
Unsettled position: Peer-to-peer (P2P) crypto transfers between individuals remain in a legal grey zone under GST. There is no specific exemption in Schedule III of the CGST Act for crypto transfers, but no enforcement mechanism or specific taxing provision exists either. If you conduct high-volume P2P trading, consult a GST practitioner.
GST on Crypto Exchanges and Trading Platforms
This is where GST applicability is most clearly settled.
18% GST on Service Fees
Crypto exchanges like WazirX, CoinDCX, CoinSwitch, and ZebPay provide a facilitation service - they connect buyers and sellers and charge a commission or platform fee (typically 0.1% to 0.5% of the transaction value). This facilitation service is classified under SAC 998599 ("Other support services not elsewhere classified") and attracts 18% GST.
The GST is levied on the exchange's commission or service charge, not on the total value of the cryptocurrency being traded. For example, if you buy Rs 1,00,000 worth of Bitcoin and the exchange charges a 0.2% fee (Rs 200), GST of Rs 36 (18% of Rs 200) applies.
The GST Council confirmed this position on 7 July 2025, clarifying that 18% GST applies to all service fees charged by crypto exchanges, covering spot trading, margin trading, derivatives, staking fees, withdrawal fees, and deposit charges.
What Exchanges Must Do
| Obligation | Requirement |
|---|---|
| GST Registration | Mandatory once aggregate turnover exceeds Rs 20 lakh (Rs 10 lakh for special category states) |
| Tax Rate | 18% CGST + SGST (intra-state) or 18% IGST (inter-state) on service fees |
| SAC Code | 998599 (Other support services n.e.c.) |
| Returns | GSTR-1 (outward supplies), GSTR-3B (summary return) monthly |
| Invoice | Must issue tax invoice showing GST separately for every service fee charged |
| ITC | Eligible on business expenses (hosting, software, marketing, professional fees, office costs) |
GST on Cryptocurrency Mining
Cryptocurrency mining involves validating blockchain transactions and earning rewards (newly minted coins plus transaction fees). The GST treatment of mining raises a nuanced question: is the miner providing a "service" to the blockchain network?
The General Position
Under the broad definition of "supply" in Section 7 of the CGST Act, mining could constitute a supply of services - the miner provides computational verification services and receives consideration in the form of mining rewards (cryptocurrency).
However, this position has not been formally clarified by the CBIC. No dedicated circular addresses crypto mining, and no Authority for Advance Ruling (AAR) has issued a definitive ruling specifically on the GST treatment of mining rewards.
Practical Implications for Miners
If mining is treated as a taxable supply of services:
- Taxable value: The fair market value of the cryptocurrency received as mining reward on the date of receipt
- GST rate: 18% under the residual services category
- Registration: Required if the value of mining rewards exceeds Rs 20 lakh in a financial year
- ITC: Available on mining-related expenses such as hardware (GPUs, ASICs), electricity, internet, and hosting charges if the miner is registered under GST
The practical challenge is valuation. Mining rewards are received in cryptocurrency, not in Indian rupees. The CGST Rules do not prescribe a specific valuation method for crypto mining rewards. Miners would likely need to use the fair market value on the date of receipt, determined by reference to a recognised exchange.
Professional miners: If you operate a mining rig commercially and your annual reward value exceeds Rs 20 lakh, obtain a GST registration proactively. The absence of specific CBIC guidance does not exempt you from the general supply provisions of the CGST Act.
GST on NFT Transactions
Non-fungible tokens (NFTs) present a unique classification challenge under GST because they can represent digital art, music, collectibles, gaming assets, or real-world asset tokenisation.
Goods or Services?
The classification depends on the nature of the transaction:
| Transaction Type | Likely Classification | Reasoning |
|---|---|---|
| Outright sale of NFT (full ownership transfer) | Supply of goods | Transfer of title in intangible movable property |
| License or right to use NFT content | Supply of services | Temporary transfer of right to use intellectual property |
| NFT delivered electronically to Indian buyer from abroad | OIDAR service | Falls under IGST provisions for cross-border digital services |
Tax Rate
No specific GST rate notification covers NFTs. Under the residual classification:
- If treated as goods: 18% GST under the residual entry for goods not elsewhere specified
- If treated as services: 18% GST under SAC 997337 (licensing services for the right to use intellectual property) or SAC 998599 (other support services)
The government has not issued any specific classification guidance for NFTs under GST, making this an unsettled area where the exact treatment may vary depending on the specific facts of each transaction.
Foreign Exchanges and OIDAR Rules
When Indian users trade on foreign crypto exchanges such as Binance, Coinbase, Kraken, or OKX, the OIDAR (Online Information and Database Access or Retrieval) services framework applies.
How OIDAR Classification Works
Under Section 14 of the IGST Act, read with Rule 2 of the IGST (Registration of certain notified categories of persons) Rules, 2017, OIDAR services are defined as services delivered over the internet that are essentially automated, require minimal human intervention, and are impossible to ensure in the absence of information technology. Crypto exchange services meet all three criteria.
Key Compliance Requirements for Foreign Exchanges
| Requirement | Detail |
|---|---|
| GST Registration | Mandatory from the first rupee - no threshold exemption under Section 24 of the CGST Act |
| Registration Form | GST REG-10 (simplified registration for non-resident OIDAR providers) |
| Tax Rate | 18% IGST on service fees charged to Indian users |
| Returns | GSTR-5A (quarterly return for OIDAR providers) |
| Place of Supply | Location of the Indian recipient (Section 13(12) of the IGST Act) |
| Reverse Charge | If the foreign exchange has not registered, registered Indian recipients must self-assess and pay under reverse charge mechanism (Section 5(3) of the IGST Act) |
Following the GST Council's July 2025 clarification, Bybit became one of the first major offshore exchanges to formally comply by implementing 18% GST charges on service fees for Indian users. Other global exchanges have been slower to comply, creating a reverse charge obligation for their Indian business users.
Impact on Indian Users
If you use a foreign exchange that has NOT registered under Indian GST:
- Individual users (unregistered): The foreign exchange is still liable, but enforcement is challenging. No GST obligation falls on you directly.
- Business users (GST-registered in India): You are liable to pay GST under the reverse charge mechanism on the service fees charged by the foreign exchange.
Input Tax Credit for Crypto Businesses
Registered crypto exchanges and mining operations can claim Input Tax Credit (ITC) on GST paid on their business inputs, following the standard provisions under Sections 16 to 21 of the CGST Act.
Eligible ITC Categories for Crypto Exchanges
- Cloud hosting and server infrastructure (AWS, Azure, GCP)
- Software licenses and SaaS subscriptions
- Legal and professional fees (CA, CS, legal counsel)
- Marketing and advertising expenses
- Office rent and utilities
- KYC/AML compliance software
- Payment gateway charges
- Cybersecurity and audit services
ITC Restrictions
Standard restrictions under Section 17(5) of the CGST Act apply. ITC is not available on:
- Food and beverages, outdoor catering
- Membership of clubs, health and fitness centres
- Motor vehicles and conveyances (with exceptions)
- Personal consumption expenses
Individual crypto investors (not registered under GST) cannot claim ITC on any expenses, including exchange fees. ITC is exclusively available to persons registered under GST who use inputs for making taxable outward supplies.
Looking for expert help with GST registration and ITC reconciliation? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant end-to-end: filings, notices, and advisory, all in one place.
GST Registration Thresholds
| Entity Type | Threshold | Basis |
|---|---|---|
| Domestic crypto exchange (services) | Rs 20 lakh aggregate turnover (Rs 10 lakh for special category states) | Section 22, CGST Act |
| Foreign exchange providing OIDAR services | No threshold - mandatory from first rupee | Section 24, CGST Act (compulsory registration) |
| Individual crypto miner (commercial) | Rs 20 lakh aggregate turnover | Section 22, CGST Act |
| Individual investor (personal trades) | Generally not required | Investment activity not treated as "business" under Section 2(17) |
For domestic exchanges, in practice, the Rs 20 lakh threshold is crossed almost immediately upon commencing operations. The obligation is measured against aggregate turnover (total value of taxable supplies, exempt supplies, exports, and inter-state supplies), not profit.
Income Tax vs. GST on Crypto: Complete Comparison
One of the most common sources of confusion is conflating the income tax and GST positions. This table lays out the distinction clearly.
| Parameter | Income Tax (Section 115BBH) | GST (CGST Act) |
|---|---|---|
| What is taxed | Profit/gain on transfer of VDA | Supply of goods or services in course of business |
| Who pays | The individual earning the profit | The person making the taxable supply (exchange, miner) |
| Tax rate | 30% flat (plus surcharge and cess) | 18% on service fees |
| Taxable event | Transfer (sale, exchange, gift) of VDA | Supply of facilitation service or goods |
| Deductions allowed | Only cost of acquisition (no other expense) | Full ITC on business inputs for registered persons |
| TDS/TCS | 1% TDS under Section 194S | Standard GST collection on invoices |
| Loss set-off | Not allowed against any income | Not applicable (GST is on turnover, not profit) |
| VDA definition | Section 2(47A) of IT Act - specific | No equivalent definition in CGST Act |
| Individual investor liability | Yes, on every profitable transfer | No, unless trading constitutes a "business" |
| Exchange liability | TDS deduction obligation | 18% GST on service fees - direct liability |
What May Change: GST Council Proposals
The GST Council's law committee has examined whether cryptocurrency transactions should attract a higher GST rate, potentially aligning with the treatment of online gaming, lottery, and betting. In 2022, a proposal to levy 28% GST on crypto was discussed, though never implemented.
Following the GST 2.0 rate restructuring in September 2025 (which replaced the 28% slab with 40% for certain demerit goods), any future proposal to tax crypto at a higher rate would theoretically fall under the 40% bracket. However, as of July 2026, no such proposal has been formally tabled or approved by the GST Council.
The current operative position remains 18% GST on exchange service fees only, with no GST on the underlying crypto transaction value for individual investors.
Frequently Asked Questions
Frequently Asked Questions
I pay 30% income tax on crypto profits. Do I also pay GST?
No, as an individual investor, you do not pay GST on your crypto trading profits. The 30% tax under Section 115BBH (Income Tax Act) and GST under the CGST Act are separate levies. GST at 18% is paid by the exchange on its service fee, not by you on your gains. You may see GST included in the exchange's fee breakdown, but that is the exchange's output tax, not your liability.
Is cryptocurrency classified as goods or services under GST?
Cryptocurrency is classified as 'goods' under the CGST Act. It qualifies as intangible movable property under Section 2(52) because it is neither 'money' (not recognised by RBI as legal tender per Section 2(75)) nor 'securities' (not regulated by SEBI under the SCRA, 1956). The exchange platform's facilitation service is separately classified as a 'service.'
What SAC code applies to crypto exchange services?
Crypto exchange services (brokerage, facilitation, platform fees) are classified under SAC 998599 - 'Other support services not elsewhere classified' under heading 9985 (Support services). The applicable GST rate is 18%.
Do I need GST registration if I mine cryptocurrency?
If the fair market value of your mining rewards exceeds Rs 20 lakh in a financial year (Rs 10 lakh in special category states), you should obtain GST registration. Mining is treated as a supply of computational verification services, and the rewards constitute consideration. However, no specific CBIC circular addresses this, so consult a GST practitioner for your specific situation.
Can a crypto exchange claim Input Tax Credit?
Yes. A GST-registered crypto exchange can claim ITC on all eligible business inputs: cloud hosting, software subscriptions, legal fees, marketing expenses, office rent, and compliance costs. Standard ITC provisions under Sections 16-21 of the CGST Act apply. Individual investors who are not GST-registered cannot claim any ITC.
Does the Income Tax VDA definition apply for GST purposes?
No. The VDA definition under Section 2(47A) of the Income Tax Act (inserted by Finance Act, 2022) applies exclusively for income tax purposes. The CGST Act does not contain a corresponding VDA definition. GST classification of crypto relies on the CGST Act's own definitions of goods (Section 2(52)), services (Section 2(102)), and money (Section 2(75)).
What happens if I use a foreign exchange like Binance that has not registered for Indian GST?
If you are a GST-registered business user, you are liable to pay GST under the reverse charge mechanism (Section 5(3) of the IGST Act) on the service fees charged by the foreign exchange. If you are an unregistered individual user, the liability technically remains with the foreign exchange, though enforcement on offshore platforms is limited.
Are NFTs taxable under GST?
The GST treatment of NFTs is unsettled. An outright sale (ownership transfer) would likely be treated as supply of goods at 18%. A license or right-to-use arrangement would be treated as supply of services at 18%. No specific government notification or CBIC circular addresses NFT classification under GST.
Need GST Compliance for Your Crypto Business?
If you operate a cryptocurrency exchange, mining operation, or NFT marketplace, GST compliance is not optional. Tax Garden provides end-to-end GST services for VDA businesses: registration, monthly return filing (GSTR-1 and GSTR-3B), ITC reconciliation, and advisory on classification disputes. Our flat-fee plans are designed for crypto-native businesses that need reliable compliance without billing surprises. Talk to our GST team or check our pricing.
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Frequently Asked Questions: Tax Services in Kondapur & Hyderabad
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Sources: CGST Act, 2017 (Sections 2(17), 2(52), 2(75), 2(102), 7, 8, 9, 16-21, 22, 24; Schedule II, Schedule III); IGST Act, 2017 (Sections 5(3), 13(12), 14); Finance Act, 2022 (Section 2(47A) of IT Act); GST Council clarification on crypto exchange services (7 July 2025); CBIC Chairman Vivek Johri's statements at FICCI virtual session (2022); Madras High Court order in WazirX/Zanmai Labs proceedings (October 2025); SAC Code 998599 under Notification No. 11/2017-CT(R). All statutory references verified against current legislation. Specific AAR rulings on crypto mining were searched but none confirmed as publicly available as of the date of publication.
