WazirX exchange belonging to Binance was accused of tax evasion by Indian authorities
The financial authorities of Mumbai (India) on December 31 confirmed that they had discovered tax evasion by WazirX, a cryptocurrency exchange owned by Binance.
WazirX belonging to Binance was accused of tax evasion by Indian authorities
According to a statement by the Mumbai Internal Revenue Service, during the inspection of the activities of WazirX, the cryptocurrency trading platform acquired by Binance in 2019, the agency found that the exchange had engaged in tax evasion on goods and services. Authorities then proceeded to collect $6 million in taxes, penalties, and interest.
Officers of CGST Mumbai East comm’te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai
— CGST Mumbai Zone (@cgstmumbaizone) December 30, 2021
As a precaution, the tax department will expand the investigation to other exchanges. A representative of the tax department 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 tax evasion cases. The tax department will expand its investigation of all exchanges registered to operate in Mumbai in the coming days.”
Right on the first day of the New Year 2022, Indian authorities unexpectedly checked the books of a series of exchanges, including CoinDCX, Unocoin, Coinswitch Kuber, and BuyUCoin.
Meanwhile, WazirX’s side stated that the allegation of tax evasion was actually a misunderstanding and that the exchange was willing to comply with the law. The representative explained:
“There are a number of unclear points about how the goods and services tax is calculated, leading to bias in our calculations. However, we are willing to pay the missing tax to ensure compliance with the law. We never intended to evade taxes.”
Cryptocurrency legal issues in India in recent years also have many notable developments. At the end of November, it emerged 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 highest legislative body of the country of billions of people wanted to regulate cryptocurrencies instead of banning them. Because of that inconsistency, the process of drafting the law was delayed until 2022.
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