scorecardresearchCrypto exchanges evaded <span class='webrupee'>₹</span>81.54 crore GST: Finance Ministry

Crypto exchanges evaded 81.54 crore GST: Finance Ministry

Updated: 29 Mar 2022, 10:23 AM IST
TL;DR.

A total of 95.86 crore was recovered from 11 cryptocurrency exchanges, including interest and penalty

The highest amount of evasion amounting to  <span class='webrupee'>₹</span>40.5 crore was reported by Zanmai Labs, which operates as WazirX.

The highest amount of evasion amounting to 40.5 crore was reported by Zanmai Labs, which operates as WazirX.

The government has recovered around 95.86 crore from at least 11 crypto exchanges for evading goods and services tax (GST), according to data released by Parliament, reported Business Standard. This amount includes interest and penalty.

The GST investigation department has found a total tax evasion of 81.54 crore by crypto exchanges that include WazirX, Coin DCX, CoinSwitch Kuber, Buy Ucoin, UnoCoin and Flitpay, among other exchanges.

Minister of state (MoS) for finance Pankaj Chaudhary, in a written reply to Lok Sabha, said 11 cases of GST evasion by cryptocurrency exchanges have been detected by central GST formations. Other exchanges were Zeb IT Services, Secure Bitcoin Traders, Awlencan Innovations India (Zebpay), Giottus Technologies and Discidium Internet Labs, wrote Business Standard.

The highest amount of evasion amounting to 40.5 crore was reported by Zanmai Labs, which operates as WazirX.

WazirX is managed by Zanmai Labs and cryptocurrency WRX is owned by Binance Investment Co, Seychelles. The government recovered a total of about 49.18 crore from the exchange, which includes interest and penalty.

GST officials detected the evasion in January after a show-cause notice was served to WazirX in 2021. Officials allege that the exchange was not paying tax to the government despite charging commission on each transaction in cryptocurrency from both the buyer and seller.

ALSO READ: Is it wise to invest in crypto fixed deposits?

The department had observed that the exchange used to collect revenue from commission as trading fees, deposit fees and withdrawal fees.

A company spokesperson said: “Zanmai Labs has been diligently paying crores in GST every month. There was an ambiguity in the interpretation of one of the components, which led to a different calculation of GST paid. However, we voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax.”

Coin DCX was the second-largest evader with 15.70 crore followed by CoinSwitch Kuber ( 13.76 crore) and Giottus Technologies ( 3.85 crore). These exchanges paid back 16.07 crore and 3.50 crore, respectively, including interest and penalty, according to the minister’s reply.

GST officials have been investigating business transactions relating to online gaming, e-commerce and non-fungible tokens to identify the areas of tax evasion.

First Published: 29 Mar 2022, 10:23 AM IST