Six Crypto Exchanges in India To Pay $9.4 Million for Tax Evasion

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India’s Directorate General of GST Intelligence (DGGI) has raided six major crypto exchanges for “massive goods and services tax (GST) evasion.”

According to the report, the uncovered tax evasion is worth Rs 70 crore (about $9.4 million). The cryptocurrency exchanges being investigated include Unocoin Technologies, Buyucoin, Neblio Technologies, Bitcipher Labs, and Coinswitch Kuber.

The raid is coming after authorities discovered a major GST tax evasion of Rs 49.20 crores  ($6 million) by crypto exchange Wazirx. The exchange was accused of evading $5.45 million in taxation, while the remaining amount was for penalties and interests.

All in all, Rs 49.20 crores in cash was uncovered in the initial raid, including penalty and interest from the crypto exchange.

The Exchanges Were Accused Of Intentionally Evading The Taxes

The officials stated that the cryptocurrency exchange charged a commission to facilitate transactions in cryptocurrencies, but failed to remit its taxes.

The services offered by the exchanges attract a tax of 18%, but all of them have evaded it intentionally. The DGGI said it intercepted the transactions and produced evidence that the companies have been evading the taxes.

Subsequently, the crypto exchanges paid Rs crore 40 and Rs 30 crore as penalties for not complying with the statutory provisions of the GST law.

WazirX Blames Evasion On Unclear Taxation Laws

WazirX, however, blamed the evasion on the unclear taxation laws in India, stating that it has been meticulous in the payment of taxes to the best of its knowledge. According to the exchange, it has been diligent in paying its taxes every month.

“There was an ambiguity in the interpretation of one of the components which led to a different calculation of GST paid,” WazirX commented.

It added that the exchange has tried to be compliant and cooperative by voluntarily paying additional GST. WazirX suggests that the country should provide a proper regulatory framework to void the ambiguity in tax payments in the crypto industry.

India’s tax authorities have issued a warning to exchanges that they will be launching more actions on companies that fail to pay their taxes.

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