CoinSwitch Kuber and WazirX disabled cryptocurrency deposits via Rupee (INR) on its app using Unified Payments Interface (UPI). Besides UPI, bank transfers through NEFT/RTGS/IMPS were also disabled. In addition, Coinbase experienced difficulties with UPI, which lead to the temporary halt of the service.
source: Twitter
Due to a lack of regulations in India, payment services are able to shut down their services when they wish. Difficulties with INR deposits began following MobiKwik announcement that it is ending UPI payments for crypto exchanges on 9 April.
Aside from taxation (30%, effective from 1 April) on cryptocurrencies, crypto regulations in India may only take place following regulations in the United States and Europe.
It is unclear whether UPI payments will be re-enabled at CoinSwitch and WazirX. Additionally, the lack of clarity may deter investors from investing in crypto projects in the country.
The infamous 1% tax deducted at source (TDS) is effective from 1 July (unless announced otherwise). It has been estimated that there are around 18 million crypto investors in India.
Will India Raise the Crypto Tax?
Sushil Kumar Modi, a member of the upper house of India’s parliament believes cryptocurrency trading is similar to gambling and must be taxed in accordance, 50%.
"The government has not said in so many words … that crypto is like gambling. It is like lottery, it is like a casino, it is like horse racing … and in all these things the tax rates are very high. Like gambling, horse racing, casino, lottery, the GST should be on the entire transaction value.
“The government wants to make life hell for those people who are investing in cryptos. That is the bottom line. That is the main thrust of the entire tax.”
The current goods and services tax (GST) is 18%. Modi is suggesting to raise the tariff to 28%.
Modi also suggested levying 28% goods and services tax (GST) on the entire crypto transaction value, instead of only applying 18% GST on the service provided by crypto exchanges.
