The Indian government has uncovered significant unpaid Goods and Services Tax (GST) owed by prominent cryptocurrency exchanges, including Binance and WazirX. The Ministry of Finance revealed that multiple crypto firms, including CoinDCX and CoinSwitch Kuber, owe a total of 824 crore Indian rupees ($97 million) in unpaid taxes.
The Tax Evasion Details
According to Pankaj Chaudhary, India’s Minister of State for Finance, investigations into several cryptocurrency exchanges have led to the discovery of tax evasion. The authorities are focusing on exchanges such as Binance, WazirX, CoinDCX, and CoinSwitch Kuber for unpaid GST, which has sparked multiple legal proceedings.
In August, Binance faced demands to pay 722 crore Indian rupees ($85 million) in unpaid GST taxes. Despite this, Binance has reportedly not settled its dues, while other exchanges are in the process of addressing their penalties.
GST Recovery Efforts and Penalties
As part of an ongoing crackdown, the Indian government has already recovered 122.3 crore rupees ($14 million) in taxes, penalties, and interest. This includes payments from exchanges like WazirX, which owes 40.5 crore rupees ($4.8 million) in unpaid GST, and CoinDCX, which has 16.84 crore rupees ($1.9 million) pending.
Binance has yet to pay the penalty, and its recovery is not reflected in the total amount recovered. Binance spokespersons state that the exchange remains cooperative and is working with authorities to resolve the issue.
WazirX Explains GST Discrepancy
WazirX addressed the situation by stating that the GST law regarding cryptocurrencies was unclear when the alleged tax evasion occurred. The company has since worked to clarify its position and settle any outstanding issues.
Wider Impact on Crypto Firms in India
The Indian government has also registered 47 virtual digital asset service providers with the Financial Intelligence Unit, under the country’s Anti-Money Laundering laws. This move further indicates the government’s growing oversight of the crypto industry.
As investigations continue, the Indian government’s crackdown on tax evasion within the crypto sector highlights the increasing regulatory scrutiny of digital assets. These efforts could set a precedent for how cryptocurrencies are taxed and regulated in the future across India and potentially inspire similar actions in other countries.
