How DGFT would react to exports through Bitcoin?

[BTCIndia]

Folks, do you have any idea how DGFT is going to react to exports done through Bitcoin?
Please comment your views!

[adv.kanishk]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

[BTCIndia]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

I've had a brief talk. Is 'barter' acceptable under Sales of Goods Act or any other act? Is it legal to 'barter'?

[adv.kanishk]

Barter system is not recognized under Sale of Goods Act. There are essential ingredients for a transaction to come under Sale of Goods Act i.e. Offer, Acceptance, Consideration, price and transfer. I understand Consideration would not cover your aspect however, I need to look into it in detail.

[Benson Samuel]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

I've had a brief talk. Is 'barter' acceptable under Sales of Goods Act or any other act? Is it legal to 'barter'?

Barter is legal and unregulatable in most countries.

[BTCIndia]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

I've had a brief talk. Is 'barter' acceptable under Sales of Goods Act or any other act? Is it legal to 'barter'?

Barter is legal and unregulatable in most countries.

Benson, any law/interpretation of law to vouch your claim that 'barter is legal'?

[subvolatil]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

I've had a brief talk. Is 'barter' acceptable under Sales of Goods Act or any other act? Is it legal to 'barter'?

Barter is legal and unregulatable in most countries.

Benson, any law/interpretation of law to vouch your claim that 'barter is legal'?

You should consult Kanishk about this.

[Benson Samuel]

My friend reaction from DGFT can only be told by an authorised DGFT personnel. What you need to see is whether there are any rules/provisions barring you from export of goods and acceptance of payment through bitcoins and also keep in mind the benefits which you might loose as the sole purpose of export promotion is that foreign currency comes to india, in your case that might get affected. There are certain other factors which might be affected. You should consult your consultant and if you want we can also help you in that front.

I've had a brief talk. Is 'barter' acceptable under Sales of Goods Act or any other act? Is it legal to 'barter'?

Barter is legal and unregulatable in most countries.

Benson, any law/interpretation of law to vouch your claim that 'barter is legal'?

We had explored barter when we did this piece - http://cis-india.org/internet-governance/bitcoin-legal-regulation-india

Transfer of Bitcoins from one person to another within the territory of India
Although we have determined above that Bitcoins would in all probability be treated as goods and therefore any sale of Bitcoins would be governed by the Sale of Goods Act, 1930 however it must be noted that the Sale of Goods Act does not regulate barter transactions. This is so because the sale of goods means a contract whereby the property in the goods is actually transferred by the seller to the buyer and according to section 4 of the Sale of Goods Act the transfer of the property in the goods is for a price, i.e., for money consideration. As price is an essential element of a contract of sale, barter is ruled out from a transaction of sale of goods. This means that any transaction whereby payment is made in Bitcoins would come within the category of a barter transaction, for example if flipkart.com starts accepting payment in Bitcoin then the transaction of paying for a pair of shoes through Bitcoin would infact be a barter transaction and would not be governed by the Sale of Goods Act.

[adv.kanishk]

We had explored barter when we did this piece - http://cis-india.org/internet-governance/bitcoin-legal-regulation-india

Transfer of Bitcoins from one person to another within the territory of India
Although we have determined above that Bitcoins would in all probability be treated as goods and therefore any sale of Bitcoins would be governed by the Sale of Goods Act, 1930 however it must be noted that the Sale of Goods Act does not regulate barter transactions. This is so because the sale of goods means a contract whereby the property in the goods is actually transferred by the seller to the buyer and according to section 4 of the Sale of Goods Act the transfer of the property in the goods is for a price, i.e., for money consideration. As price is an essential element of a contract of sale, barter is ruled out from a transaction of sale of goods. This means that any transaction whereby payment is made in Bitcoins would come within the category of a barter transaction, for example if flipkart.com starts accepting payment in Bitcoin then the transaction of paying for a pair of shoes through Bitcoin would infact be a barter transaction and would not be governed by the Sale of Goods Act.

A great insight and nicely put through post Benson. I am looking and researching on the whole aspect and have come up with some great research. Will surely share it once I am through with it. This question is actually the main key to make people understand whether bitcoin can be legal or not. As per my understanding the trading of goods by payment through bitcoin is an perfect example of barter system. One is giving goods against a piece of encoded computer language which can also be termed as software. Lets see if my research is able to struck oil at the bottom of the sea!!!!

[Benson Samuel]

Agreed, the only thing that we need in order to proceed is a definition of Bitcoin by the 'regulators', if any come up.

[adv.kanishk]

My objective of research if even surpassing that. That will come eventually when RBI reacts to bitcoin. I am researching on a way to make people trust bitcoin transaction which can give them a sense of security that they will not be voilating any regulations, infact if the research achieves its goal it will be giving the trading of bitcoin a legal way out.

I think if I hit the oil I should get it copyrighted....lolzzzz

[BTCIndia]

Agreed, the only thing that we need in order to proceed is a definition of Bitcoin by the 'regulators', if any come up.

Regulators has already defined crypto-currency as "Virtual Currency" on notification from 24th Dec, 2013. And good things is, term 'Virtual' is vague word which itself needs clarification and you know what currency is 2(m). 

[Benson Samuel]

Agreed, the only thing that we need in order to proceed is a definition of Bitcoin by the 'regulators', if any come up.

Regulators has already defined crypto-currency as "Virtual Currency" on notification from 24th Dec, 2013. And good things is, term 'Virtual' is vague word which itself needs clarification and you know what currency is 2(m). 

They have also confirmed that they are not the regulators for Bitcoin in a mail to Laxmicoin.
So, cannot see how their definition can stand.

Besides, Bitcoin is far more than a VC, so it is a poor definition that has too many loopholes - if that was considered the definition.

[BTCIndia]

Agreed, the only thing that we need in order to proceed is a definition of Bitcoin by the 'regulators', if any come up.

Regulators has already defined crypto-currency as "Virtual Currency" on notification from 24th Dec, 2013. And good things is, term 'Virtual' is vague word which itself needs clarification and you know what currency is 2(m). 

They have also confirmed that they are not the regulators for Bitcoin in a mail to Laxmicoin.
So, cannot see how their definition can stand.

Besides, Bitcoin is far more than a VC, so it is a poor definition that has too many loopholes - if that was considered the definition.

Who is going to regulate Bitcoin then? Finance Ministry? Are they working on some kind of regulation or still in stage or understating crypto-currency?

[Benson Samuel]

I assume that various entities that form our current regulatory system would need to create a new group that specifically addresses Crypto.
They would need to be respected entities that have ground their teeth on the various domains that Bitcoin can fall under.

Even then, not sure how far this will go.

Remember, people have tried to regulate email and the internet -- both have been disruptive technologies that have shook the balance of power.
Both technologies stand strong today, with minimal to no regulation. And even in the instances where there are checks and balances put in place, these can be easily overridden with no effort.

Maybe Bitcoin will fall into this space too.

While the internet brought us freedom of learning and knowledge, email brought us freedom of communication across distance and Bitcoin may be the tool that brings us financial freedom as well.

[adv.kanishk]

I agree with benson on this. Even Japan Government is forming Japan Authority of Digital Asset (JADA) association to look into digital currency aspect.