Context:

The Finance Ministry recently proposed instituting an 18% goods and services tax (GST) on crypto trading.

Crypto Currencies

• A cryptocurrency is a digital representation of value that can be digitally traded and functions as:
  • A medium of exchange, and/ or
  • A unit of account and/or
  • A store of value, but does not have a legal tender status.
• It fulfills the above functions only by agreement within the community of users of the virtual currency.
• It is not issued or neither guaranteed by any jurisdiction.
• Cryptocurrency is a type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain.
• A transaction involving cryptocurrency that is recorded on a distributed ledger is referred to as an “on-chain” transaction; a transaction that is not recorded on the distributed ledger is referred to as an “off-chain” transaction.