The Financial Authority of Mumbai (India) on December 31 confirmed that it had discovered tax evasion by WazirX, a cryptocurrency exchange owned by Binance.
WazirX of Binance accused of tax evasion by Indian authorities
During an examination of the activities of WazirX, the cryptocurrency exchange acquired by Binance in 2019, the agency discovered that the exchange had acted, according to a statement by the Mumbai Internal Revenue Service. tax evasion on goods and services. Authorities then proceeded to collect $6 million in taxes, penalties and interest.
CGST Mumbai East comm’te officials discovered GST Evasion of Rs 40.5 Cr. on commission of Wazir X Cryptocurrencies & withdrawal of Rs 49.2 Cr. in cash in the form of GST, Interest & Penalties today on 12/30/2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai
– CGST area Mumbai (@cgstmumbaizone) December 30, 2021
As a precaution, the tax department will expand the investigation to other exchanges. A tax representative said:
“The above case is part of a special anti-tax evasion investigation conducted by the Mumbai tax department based on in-depth data analysis. We are closely monitoring business transactions related to emerging economic sectors such as e-commerce, online gaming and NFT to identify possible cases of tax evasion. The Tax Department will expand its investigation to all registered exchanges operating in Mumbai in the coming days.”
Right on the first day of the new year 2022, Indian authorities suddenly checked the books of a series of exchanges, including CoinDCX, Unocoin, Coinswitch Kuber and BuyUCoin.
Meanwhile, the WazirX side claims that the allegation of tax evasion is actually a misunderstanding and that the exchange is ready to comply with the law. The representative explained:
“The way to calculate tax on goods and services still has some unclear points, leading to a deviation in our calculation. However, we are willing to pay any outstanding tax to ensure compliance with the law. We never intended to evade taxes.”
Cryptocurrency regulatory issues in India in recent years have also had many notable developments. At the end of November, it was reported that the authorities were preparing a bill to ban all cryptocurrencies and clear the way for the country’s CBDC. However, it was later leaked that during the session of the National Assembly, the country’s highest legislative body of billions of people wanted to regulate cryptocurrencies instead of banning them. Because of that inconsistency, the drafting of the law was delayed until 2022.
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