I am planning to do crypto transaction on a decentralised exchange. Most of the transactions I want to do would be p2p. Suppose I buy crypto worth 1L and then sell it on the same day,there would be two entries in my bank account and the turnover would be 2L. Till now I was doing the same but my bank called me and said that I need to open a current account if I want to do heavy turnover. Now the problem is that they are asking for GST number for opening a current account if the turnover is going to be above 40L(GST registration Limit). My profits are around 1% only. So on a turnover of 2L I would be earning only 1K rs, if I register for GST and pay 18% then that would be a huge loss. What is the way out? (I know it is a grey area but I want to know how are exchanges like coinbits are able to open their current account) @Quicko @nithin @ShubhS9
Afaik all crypto exchange has a wallet facility also. So you add money into your trading wallet and trade as many times. Why would it make entry in real bank account? Which exchange are you using?
I have used unocoin, coinswitch,wazir
He is using P2P transactions. Not via the trading wallet. So, I am guessing he is receiving payments via UPI.
Who would you collect GST from? Fellow crypto-traders? Does it work that way?
You collect GST from your customers if you are the owner of a business which offers some Goods or Services, right?
Why are using P2P over trading wallet?
May be he is using sites like localbitcoin. But yes he should use trading exchange.
He might be using WazirX too. Wazir allows both : trading exchange and as well as P2P.
Because of the arbitrage. I am planning to gain the arbitrage. And yes you are right,I am getting cash through UPI. GST is the major problem as banks are not ready to open a current account without GSTN and if I get the GSTN what shall I pay as tax?
If you are buying from one exchange and selling on another, doesn’t it involves tx charge? Even within exchange there’s huge difference in buy,sell price. Which could lower your profits.
One thing you can do is accept PayPal,Paytm,phonepay wallet payments. But again it will have charges for transferring money to bsnk
Please correct me if I am wrong.
When we trade on the stock exchange, the broker is the business and we traders are customers. The broker collects a brokerage fee on our turnover as their service fee. Then the broker also collects GST on the brokerage fee(not the turnover). So, we as traders pay the GST and the broker as the service provider collects GST from us and pays the income tax department.
If you get a GSTN, aren’t you then mandated as a business to collect the GST from your “customers” on the “invoice” you give them.
Who would be your customers here? The other traders? Would they accept an invoice from you and pay GST along with the invoiced amount as payments to you?
GST is indirect tax, right? Not a direct tax like income tax payable by you based on what your net returns are. How would this work for you? Will your P2P traders agree to pay GST on the money (your net profit/net loss on each trade) they owe you?
Yes brother,after deducting every charges I am able to save around 0.6% on a transaction but the only problem is turnover,which can easily go above roof. To earn a significant amount I will have to do turnover worth crores of rupees and I think that would bring me under the scanner of GST authorities even when I am not stealing any taxes.
So the conclusion is that I am not liable for any GST. But how do I convince the banker to open my account without GSTN?