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.
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.