The Indian authorities are reportedly having plans down their pipeline for a reclassification towards crypto exchanges to a similar category as e-commerce platforms. 

Specifically, should the plan go through, users will reportedly have to pay just 1% for every transaction, or trade, for the Goods and Services Taxes (GST). 

At the moment, the Indian authority reportedly imposes an 18% GST on transactions carried out on crypto exchanges with proper registration, which is passed to users as trading fees. The process is the same as the tax protocol of India’s stock brokerages.

Nonetheless, taking into account the legal domicile of the exchange, the new GST proposal could lead to an increase in tax liabilities for a few particular users. 

In July this year, Business Insider India shared a report regarding the possibility of the Indian authority requesting foreign crypto exchanges to levy a similar 18% GST as domestic equivalents to their clients when carrying out business with Indian nationals. 

It reportedly was standard protocol for crypto exchanges from outside of the nations to have exemption from GST registration in India, consequently leading to a significant tax gap between users of different exchanges.

Indian regulators are still reportedly having contradictory attitudes towards the construction of a regulatory framework dedicated to cryptocurrencies in the nation. Legislations put up for proposals are varied, going from granting cryptocurrencies the classification of commodities to outright bans on the trading of digital assets.

In 2020, the Supreme Court of India reportedly abolished the ban by the Reserve Bank of India, which bars Indian banks from doing business with crypto entities.