Services Provided By A Foreign Entity Outside India Is Not Taxable Under The Income: Fill & Download for Free

I am broadly covering Direct Taxes (Income Taxes) and Indirect taxes (At Central Government level and State Government level). The other level of classification can be based on who levies the taxes. It is an overview and not supposed to be a comprehensive in-depth analysis of different taxes.Central Government levies taxes on the following:Income Tax: Tax on income of a personCustoms duties: Duties on import and export of goodsCentral excise: Taxes on Manufacturing of dutiable goodsService tax: Taxes on provision of servicesState Governments can levy the following taxes:Value Added Tax (VAT): This is tax on sale of goods. While intra-state sale of goods are covered by the VAT Law of that state, inter-state sale of goods is covered by the Central Sales Tax Act. Even the revenue collected under Central Sales Tax Act is done so by the State Governments themselves and actually the Central Government has no role to play so.Stamp duties and Land Revenue: Since land is a matter on which only State Governments can govern, thus the Stamp duties on transfer of immovable properties are levied by State Governments.State Excise on Liquor and certain agricultural goods.Apart from the above, certain powers of taxation have been devolved in the hands of local bodies. These local governing bodies can levy taxes on water, property, shop and establishment charges etc.Direct TaxesThey are called so as the burden of taxation falls directly on the tax payer.Under the Income Tax Act, 1961 The Central Government levies direct taxes on the income of individuals and business entities as well as Non business entities also. The taxation level depends on the residential status of individuals. The thumb rule of residential status is that an individual becomes resident in India if he has remained in India for more than 182 days in a particular residential year. If he becomes resident in India, then his global income i.e. income earned even outside India is taxable in India. This has to be noted very carefully by Expatriates on deputation to India. They need to plan their stay in such a manner as to avoid becoming a resident in India. The following para explains this in a slightly more detailed manner:Tax ResidentAn individual is treated as resident in a year if present in India:For 182 days during the year orFor 60 days during the year and 365 days during the preceding four years.So an expatriate has to time his stay in India by taking into account the above.So what is taxable for a Resident but “Not Ordinarily Resident”?A resident who was not present in India for 730 days during the preceding seven years or who was nonresident in nine out of ten preceding years is treated as not ordinarily resident. A person not ordinarily resident is taxed like a non-resident but is also liable to tax on income accruing abroad if it is from a business controlled in or a profession set up in India.What is taxable for a Non-Resident?Non-residents are taxed only on income that is received in India or arises or is deemed to arise in India. He is entitled to get benefit of any double taxation avoidance agreement that his country of residence has signed with India. Then he shall be liable for taxes at rates mentioned in the Indian domestic tax laws or the rates mentioned in the Double Taxation Avoidance Agreement whichever is lower.What is taxable for a Resident?His global income is taxable irrespective of whether earned or related or received in India.Thus any expatriate needs to plan his stay so that he does not, unwittingly, become a Resident for tax purposes.Taxation slabs for Individuals for the FY2015-16:Individual resident aged below 60 year.Income SlabsTax RatesWhere the taxable income does not exceed Rs. 2,50,000/-.NILWhere the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-10% of amount by which the taxable income exceeds Rs. 2,50,000/-.Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.Where the taxable income exceeds Rs. 10,00,000/-.Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-2. Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous yearIncome SlabsTax RatesWheree taxable income does not exceed Rs. 3,00,000/-NIL2. Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-10% of the amount by which the taxable income exceeds Rs. 300,000/-.Less : Tax Credit u/s 87A – 10% of taxable income upto a maximum of Rs. 2000/-.3. Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-4.Where the taxable income exceeds Rs. 10,00,000/-Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.3. Individual resident who is of the age of 80 years or more at any time during the previous yearIncome SlabsTax RatesWheree taxable income does not exceed Rs. 5,00,000/-NIL2. Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.3. Where the taxable income exceeds Rs. 10,00,000/-Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-Amounts invested in certain investments like Employee Provident Fund, Public Provident Fund, Tax saving Fixed Deposits, are also eligible for deduction under section 80C upto Rs.1,50,000 per year.Corporate Taxation:The rate at which Corporates are taxed in India is 30% plus a 3% cess. Thus the total comes to 30.9%. Further if the taxable income is more than Rs. 10 million, then there is an additional surcharge of 12% on the base tax rate.Dividend Distribution Tax (DDT)Under Section 115-O of the Income Tax Act, any amount declared, distributed or paid by a domestic company by way of dividend shall be chargeable to dividend tax. So if a company declares divided, it has to pay an effective rate of 16.995% on the dividends declared. This is apart from the 30.9 % taxes mentioned above. The rationale for this tax is that after paying this tax, the dividend so declared becomes tax free in the hands of the recipient of dividend.Minimum Alternative Tax (MAT)Normally, a company is liable to pay tax on the income computed in accordance with the provisions of the income tax Act, but many a times due to exemptions under the income tax Act, there is huge actual profit as shown in the profit and loss account of the company but no taxable income. To overcome this issue, and in order to bring such companies under the income tax act net, the concept of Minimum Alternate Tax (MAT) has been introduced. The present rate of MAT is 19.05%.Another aspect which must be looked into is the concept of Witholding Taxes; also called as Tax Deduction at Source (TDS).Tax Deduction at Source (TDS)This point is being specifically mentioned because the penalties of non-compliance are very stringent. As per the provisions of the Indian tax laws, certain payments are covered under tax withholding norms. Under this, the person responsible for making any payment is required to withhold a certain specified percentage of the payment amount as taxes and deposit it with the Government treasury. In addition, the person is required to prepare a certificate of tax deduction and provide it to the person on whose behalf the deductions are made. Every quarter i.e. 3 months, returns have to be filed by the deductor and credit must be given to the deducted in the returns.The following are the areas where tax withholding is most common in the Indian scenario:SalariesThe salaried employees of the drawing beyond the minimum taxable salary would be covered under the tax withholding requirements and annual tax withholding returns are to be submitted with the Revenue authorities.ContractorsPayments made to a contractor for carrying out any work would require withholding of tax at source from such payments, ifcertain threshold limits are crossed. Typical examples of such payments will include:Advertising paymentsBroadcasting and telecasting paymentsOffice renovation paymentsVehicle hire paymentsCatering payments.Job WorkCourierProfessional ServicesPayments made for professional and technical fees to Doctors, Chartered Accountants, Lawyers, Management Consultants, Engineers, Architects and other professionals would fall under this section and tax would be required to be withheld from their payments. Such withheld tax shall be deposited with the Government.RentalsPayments for rentals would attract tax deduction at source.Indirect TaxesIn India, indirect taxes is a vast ocean as there are number of taxes to be paid on manufacture, import, sale and even purchase in certain cases. Further the law is governed less by the Acts and more by day to day notifications, circulars and orders by the Governing bodies. So an explicit understanding is very much essential.Service Tax.Generally uniform rate of 12.36% (proposed to be 14% from 01-04-2015) is charged by Service tax Provider from recipient except in certain cases where liability is split between the provider of servicer and the recipient of service.Also in some cases, where there is mixed component of provision of service and provision of materials, there is some abatment given and service tax charged on the remaining part.E.g. For restaurants, the service tax is charged only on 40% of the bill as it is assumed by Govt that the total bill consists of 60% materials and 40% service.There is an exemption on payment of Service tax if the total turnover did not cross Rs. 1 million in the previous Financial Year.As Governed by the Finance Act, 1994 and other subsequent Finance Acts together read with notifications, circulars.Service tax is payable to the Central Government.Manufacture of Excisable GoodsCentral Excise duties are leviable on the manufacture of goods. However, the incidence of duty is postponed to the clearance of goods from factory or approved warehouse. It means the duty is payable once the manufactured goods leave the Warehouse/ Factory.Below are some of Excise duties leviableBasic – Basic Excise Duty is the most common Excise duty on manufacture of Goods. It is imposed under section 3 of the ‘Central Excise Act’ of 1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of basic excise duty in India.it is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India or if the turnover does not reach Rs. 15 million in a year or based on certain process of production.Excise duty rates are different for each product and based on harmonized system of classification.The rates can be found in the following linkhttp://www.cbec.gov.in/excise/cxt2013-14/cxt-1314-idx.htmApart from the basic excise duty, the other types of Excise duties are as follows but they are not of much relevance to the vast majority of goods as they are very specifically levied.Special Excise Duty : This is the duty leviable under Second Schedule to the Central Excise Tariff Act, 1985 at the rates mentioned in the said Schedule. At present this is leviable on very few items.Additional Duties of Excise (Textiles and textile Articles) : his duty is leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles ) Act, 1978. This is leviable at the rate of fifteen percent of Basic Excise Duty payable on specified textile articles.Additional Duties of Excise (Goods of Special Importance) : duty is leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. on the specified goods mentioned in its First Schedule.National Calamity Contingent Duty (NCCD): This duty is levied as per section 136 of the Finance Act, 2001, as a surcharge on specified goods like like pan masala, branded chewing tobaco, cigarettes, domestic crude oil and mobile phone.It should be noted that the excise duty is not on sale but on removal or clearance of goods which may or may coincide with sale.Central Excise Act, 1944 read with Central Excise Tariff Act, 1985 along with Rules prescribed and Circulars/ Notifications issued by the Central Board of Excise and http://Customs.It is payable to the Central Government.3. Import of GoodsCustoms duty is required to be paid whenever goods are imported from other countries in India. Normally on Exports, there is no Customs Duty except for export of a few items. Thus the taxable event is the import/ export of goods.There are mainly two ways in which Customs is calculated and collected:Specific Duties: – Specific custom duty is a duty imposed on each and every unit of a commodity imported or exported. For example, Rs.5 on each meter of cloth imported or Rs.500 on each T.V. set imported. In this case, the value of commodity is not taken into consideration.Advalorem Duties: Advalorem custom duty is a duty imposed on the total value of a commodity imported or exported. For example, 5% of F.O.B. value of cloth imported or 10% of C.LF. value of T.V. sets imported. In case of Advalorem custom duty, the physical units of commodity are not taken into consideration. Ad valorem duty is the predominant mode of levy of customs. Thus the value of goods has to be determined as per customs law before the Goods are released from Customs control.The rates of taxation in Customs can be found here:Apart from the basic Custom duties, there are some other custom duties levied in certain circumstances like:Countervailing Duty of Customs (CVD)To give Indian manufacturing a level playing field, CVD is imposed. It is equal to the excise duty on like articles produced in India. The base of this additional duty is c.i.f. value of imports plus the duty levied earlier. If the rate of this duty is on ad-valorem basis, the value for this purpose will be the total of the value of the imported article and the customs duty on it (both basic and auxiliary).Anti Dumping dutiesThese custom duties are basically intended to provide domestic manufacture against dumping of goods by foreign countries in India at dirt cheap ; even below cost prices. Mainly targeted against cheap Chinese imports. These are allowed after following WTO norms in this regard.Customs Act, 1962 read with Customs Tariff Act, 1975.Collected by Central Government4. Sale of GoodsValue Added Taxes (VAT) for intra-state Sales and Central Sales Tax (CST) for inter-state sales.VAT is actually state specific since the states and not Central Government is empowered to collect Taxes on Sale of Goods. Thus each state has its own VAT specific Act and Rules. In Maharashtra, it is the Maharashtra Value Added Tax Act (MVAT) which governs the sale of goods.The usual rate of taxes are 5% and 12.5%. Goods which are specified are covered under 5% and others are covered in 12.5%. Further there are some high value transactions like trade in bullion which attracts 1% tax. Input credit is available on the goods purchased and can be set off against the MVAT payable.Under MVAT Act, if trader has a turnover of below Rs. 1 million in previous financial year, then MVAT is not applicable in present year upto Rs. 1 million. Please note that it is optional and if the dealer. Trader does collect MVAT from the purchaser then the same will have to be deposited with the Government.Also MVAT is not applicable if the Goods are exported under H Form i.e. for exports.Each state has a specific Act.Central Sales Tax Act deals with inter-state sale of goods. However even CST is actually collected only by states.Please note that the above are not mutually exclusive. For example, if the goods are manufactured and sold by manufacturer , then both Central Excise and MVAT are applicable.Further there are some local indirect taxes levied like Local Body Taxes (LBT) or Octroi. These are expected to be abolished some time in future after introduction of Goods and Service Taxes (GST).Going forward, to avoid the cascading effect of different types of duties and also to avoid the specific problem of non-availability of input credit for one type of tax against another, the Government came up with one single tax everywhere which is very well known as the Goods and Service Taxes (GST). This is major tax reform intending to create one major market.

Income Tax:A foreign national working in India is liable to Indian Income TaxTaxation in India is based on the residential status of a person and not on citizenship. Residential status is determined solely based on physical presence in India regardless of the purpose of stay.If you spend an aggregate of 182 days or more in India in the relevant tax year, you will be considered as a resident for that year. Further, if you have been in India for 60 days or more but less than 182 days during the relevant tax year, and in the last four tax years preceding the relevant tax year you have been in India for an aggregate of 365 days or more, you shall be a resident for that year.Surcharge of 12% of the tax is applicable on tax payers having total income of more than 10 million INR. Further, there is also a levy of an education cess of 3% of the taxLong-term capital gains are subject to tax at a flat rate of 20%. Short-term capital gains are added to taxable income and subject to tax at normal rates. (Specific provisions for Securities traded at Stock Exchange)Social Security Taxes:On 1 October 2008, the Ministry of Labour and Employment, government of India notified social security schemes for International Workers (IWs). Accordingly, every foreign national is mandatorily required to contribute to the Indian social security schemes, namely, employee’s provident fund (EPF) and employee’s pension scheme (EPS), provided he or she is coming to India to work for an establishment in India to which the Provident Fund Act (PF Act) appliesFurther, IW coming from a country with which India has a social security agreement (SSA) and he or she is contributing on reciprocity basis to the home country social security, is excluded from this requirement provided he or she obtains the certificate of coverage from his or her home country.India has so far signed social security agreement (SSA) with 18 countries to help employees and employers from making double social security contributions in both the home and the host countriesContribution:Every IW has to contribute 12% of his or her salary (Basic+DA) every month towards the provident fund. The employer is required to deduct the contribution from the employee’s salary every month and after making a matching contribution of 12%.Tax deduction or exemption:Contribution made to the provident fund by an IW is eligible for deduction from his or her taxable income upto 150,000 INR per annum. Similarly, contribution by the employer and the interest accrued contributions are not taxable in the hands of the IW.Further, any withdrawal made by an IW from the provident fund is also exempt from Indian tax provisions, subject to the fulfilment of certain conditions. Monthly pension received from the pension fund after retirement is taxable as employment income.Permit and VisaAn foreign national who wishes to work in India is required to apply for an Employment Visa (EV). An EV is granted to skilled and qualified foreign individuals drawing a salary in excess of 25,000 USD per annum.EV is not granted in respect of roles for which a large number of Indian nationals are available or for routine or ordinary jobs.EV is given for a period of five years from the initial grant period including renewals in India. The duration and renewal of EV depends upon the validity of the contract.A foreign national can change his or her employer during the duration of his or her current EV with prior permission of the Ministry of Home Affairs (MHA) within the group subject to the fulfilment of specified conditions.Related family members of the EV applicant may apply for an ‘X’ visa. This enables family members to reside in India for the duration of the EV of the foreign national. The X visa can also be converted into an EV in India with the prior approval of the MHA and subject to conditionsExtension of visa:Extension of BV and EV can be undertaken in India also. The foreign national seeking extension must ensure that he or she submits the application along with supporting documents for extension within the prescribed period prior to expiry of the visa. Once an EV has been granted, all other standard conditions concerning the duration of the EV, its extension, etc are applicable.Keeping in view the rapid changes taking place in the visa regime, it is strongly recommended to check the type of visa needed and other related matters at the time when a foreign national intends to come to India so that he or she is compliant with prevalent visa regulations.Employment ContractsIndian income tax is levied on income for services rendered in India. This is true even if your employer is outside India and the salary for services rendered in Indiais paid into your bank account outside India.2. Ideally, you should be employed as a full-time employee under a service contract setting out in clear terms the remuneration or salary and the non- cash benefits (perquisites) to which you will be entitled.3. If you are being sent to India, on secondment by your foreign employer, for services to be rendered in India, a proper secondment structure should be put in place. The considerations which should be kept in mind are the following: where should the salary be delivered; if the salary is to be paid outside India, would it be charged back to the Indian entity; current exchange control regulations etc.Bank Account and Transfer of Funds to IndiaA foreign national, who is an employee of a foreign company, on secondment/deputation, can maintain a foreign currency account in a bank outside India and receive the entire salary outside India provided full taxes are paid on the said salary accrued in India. FNs working in India can repatriate 100% of their salary to a place outside India provided income tax is paid on the entire salary.A foreign national employed in India can open a bank account in India with an Indian bank or the Indian branch of a foreign bank.Funds can be remitted into a bank account in India from sources outside India (salary received outside India, etc).While rendering services in India, it is possible that you will continue to earn non-employment income (such as dividends, interest on deposits, etc). Such income normally is remitted to your bank account outside India. Subsequent transfer of the funds from your bank account outside India to your bank account in India will not make the income taxable in India. However, such non- employment income directly remitted to your bank account in India is likely to be taxable in India. As per section 8 of FEMA, any amount of foreign exchange due or accrued to a person resident in India, shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the RBI.Registration for Foreigners and Obtaining PANAs per the provisions of the Registration of Foreigners Rules 1939, foreigners entering India on EV, valid for more than 180 days or foreign national intending to stay in India for more than 180 days, are required to register with the concerned jurisdictional Foreigners Regional Registration Office (FRRO) within 14 days of their first arrival in India, irrespective of the duration of their stay.The RBI’s permission is not required for a foreign national wishing to take up employment in India. However, regulations in respect of payment and repatriation of salary as discussed are to be adhered to. Further, there may be security clearance needed for certain sensitive sectors such as telecom, etc.Obtaining a Permanent Account Number:Upon arrival in India for employment purposes, one should apply in the prescribed form for allotment of a Permanent Account Number (PAN).Income Tax Return, Assessment And Payment Of TaxesIncome tax returnAt the end of each tax year, a tax return has to be filed latest by 31 July/August following the end of the relevant tax year. It is mandatory to file the return electronically if the total income exceeds 500,000 INR or tax relief/foreign tax credit is claimed.Further, a ROR having assets or signing authority in any account located outside India will have to file the tax return even though they do not have taxable income in India. The details which needs to be included in the tax returns includes details of bank accounts with the peak balance during the year, details of financial interest in any entity with investment cost, immovable or any other asset with total cost of investment etc.Notices of assessmentThe tax authorities may take up your case for scrutiny (i.e. audit) and issue a notice to you to appear before them to explain various issues raised by them. Scrutiny assessment for high income returns are more routine than exception.After taking into account your representations, etc, the tax authority will issue an assessment order determining your gross tax liability and net tax (after adjustment of withholding tax, advance tax, and self-assessment tax, if any) payable by you or refundable to you.If you do not agree with the assessment order passed as discussed above, we have the option to file several appeals against such assessments to seek redress. The first such appeal is filed with the commissioners of income tax (Appeals). Further appeals against the order of commissioners can be filed with the Tax Tribunals. Against the orders of the Tax Tribunals, further appeals on substantial questions of law can be filed with the High Court and thereafter with the Supreme Court.Tax clearanceAs a non-domiciled individual in India, you are required to obtain a no objection certificate from the Indian tax authorities at the time of leaving the country. One of the requirements to obtain such certificate is to furnish the income tax authorities an undertaking, in the prescribed form, from your employer to the effect that the tax payable by employee to tax authorities shall be paid by the employer. On the basis of the said undertaking, the income tax authority will grant you a ‘no objection certificate’. Immigration authorities at the port of departure may require you to produce such a certificate.Transferring funds abroadEmployment income credited to your account in India is freely repatriable

The government has not yet brought taxability of bitcoins into the statute books. At the same time, levy of tax on bitcoins cannot be ruled out because the Indian income tax laws has always sought to tax income received irrespective of the form in which it is received.Therefore, the possibility of tax on bitcoins can be looked at under the following circumstances:As various entities accept bitcoin as a mode of payment, it appears that it is a currency. But it has not been termed as a currency under the FEMA Act, or as legal tender by the RBI; so, it may not qualify as currency. Whether bitcoin is a currency will remain a matter of dispute until the RBI clears its stand on it. If the RBI declares it to be a currency, any trading in it will be subject to FEMA regulations.Capital gain or business income: According to Section 2 (14) of the Income Tax Act, 1961, a capital asset means a property of any kind held by a person, whether or not connected with his business or profession. The term ‘property’ has no statutory meaning, yet it signifies every possible interest that a person can acquire, hold or enjoy.So, bitcoins could be deemed a capital asset if they are purchased for investment. Any gain arising on transfer of a bitcoin shall be taxable as capital gain. However, if the transactions in bitcoins are substantial and frequent, it could be held that the taxpayer is trading in bitcoins, and the income would be taxable as business income.Computing capital gains from sale of bitcoins: If gains arising from transfer of bitcoins are treated as capital gains, their further classification into short-term or long-term gain will depend on the period of holding of bitcoins. If a bitcoin is held for more than 36 months, it will be considered a long-term capital asset. If the period of holding is lower, it will be treated as a short-term capital asset.Short-term capital gains are taxable according to the slab rates applicable to the taxpayer. Long-term capital gains are taxed at a flat rate of 20 per cent with indexation benefits (inflation-adjusted).Taxation of bitcoins earned through mining: If profits earned from bitcoins are taxable as business income, then the bitcoins earned in the ‘mining’ process would also be taxable as business profits.However, if bitcoins are classified as capital assets, the virtual currency earned from bitcoin mining may not be taxed.Bitcoins generated during the mining process are classifiable as self-generated capital assets. Since the cost of acquisition of such bitcoins is not available, the taxpayer can take the benefit of judgement of the Supreme Court in the case of B. C. Srinivasa Setty (1981).The court held that if the cost of acquisition of an asset cannot be ascertained, the machinery provision for computation of capital gains will fail. Therefore, no capital gains can be levied on transfer of such assets. This could mean bitcoins generated through mining may be exempt from tax.Situs (location) of bitcoins for taxation: Bitcoins are intangible assets. For income tax purposes, situs of an intangible asset can vary according to its nature and obligations attached to it. Situs of an intangible property is decided on the basis of the law of the land where protection for the property is sought.Situs of an intangible asset can be linked with such tangible property with which it is most closely connected. For example, a patent is associated with plant and machinery, and a trademark or brand name is associated with goods. Thus, the situs of bitcoin can be linked with the country where its operating server is located.Taxation of bitcoin sale by NRI: Suppose an NRI sells bitcoins on an Indian exchange. Would he be liable for taxation in India? Since bitcoin is an intangible asset, income accruing or arising from its transfer outside India by a person who is not a resident in India cannot be taxed in India. Hence, sale of bitcoin by an NRI through an Indian bitcoin exchange may not be taxed in India.Is it goods or service? If bitcoin gets classified as a currency, it will be considered as ‘money’ in the CGST Act and no GST can be charged on its trading. However, exchanging bitcoin to rupees might be considered a service for the purpose of levy of GST under the category of ‘financial services’.Here, if the supplier charges any commission for providing exchange services, then GST shall be payable at 18 per cent on the commission. If no consideration is being charged for the services, the supplier shall be liable to pay GST at 18 per cent on 1 per cent of the gross amount of rupees paid by the recipient.There is a conflicting view also. If bitcoin is not considered as currency, any trading in bitcoin would be considered a service. Therefore, the supplier (who is selling the bitcoin) may be required to pay 18 per cent GST on the total value charged by him from the buyer.Taxability of bitcoin mining under GST: In the bitcoin mining process, individuals process the transactions and secure the network by using specialised hardware. In exchange, they are awarded new bitcoins. In other words, the bitcoin is a consideration awarded to individuals in lieu of their services to secure the network. Therefore, bitcoin miners may be required to pay GST on the fair market value of the bitcoin at 18 per cent. If it is not a good, foreign transactions in bitcoin shall be treated as capital account transactions and any dealing in bitcoin would require prior approval from the RBI.Be Peaceful !!!