According to a statement by Finance Minister Pankaj Chaudhary in Parliament, Binance and WazirX have been named in India’s recent tax investigation into alleged tax evasion amounting to $97 million.
The investigation arises from the Indian government’s stepped-up efforts to regulate and tax the cryptocurrency industry.
In fact, India’s Directorate General of GST Intelligence (DGGI) has been actively probing various cryptocurrency exchanges to ensure compliance with Goods and Services Tax (GST) regulations.
Indian government cracks down on cryptocurrency tax evasion
– Large exchanges like Binance e #WazirX owes ₹824 crore (that’s $97 million!) in unpaid GST.
– Other exchanges investigated: CoinDCX and CoinSwitch Kuber #Cryptotax #India #Binance pic.twitter.com/9aSr27U8uH— Chad All-In Top Daily Cryptocurrency News (@Chad_allin) December 4, 2024
“Significant tax discrepancies”
The report claims that Binance and WazirX, two major cryptocurrency exchanges, were involved in activities that led to significant tax discrepancies.
The investigation suggests that these platforms may have facilitated transactions that were not fully disclosed to tax authorities, leading to a substantial shortfall in GST collection.
WazirX, acquired by Binance in 2019, was one of India’s largest cryptocurrency exchanges.
The platform has seen exponential growth in the number of users and transaction volumes, which has inevitably attracted the attention of regulators.
The DGGI’s focus on WazirX is part of a larger investigation into several crypto platforms operating in India.
This investigation highlights the regulatory challenges faced by cryptocurrency exchanges operating in India.
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This uncertainty has posed significant operational challenges for exchanges like WazirX, which must navigate complex legal environments while maintaining compliance with local laws.
In response to these allegations, both Binance and WazirX have expressed their commitment to compliance and transparency.
They highlight their continued cooperation with the Indian authorities to resolve any discrepancies and ensure compliance with tax regulations.
The exchanges also highlighted their efforts to implement robust compliance measures. This includes Know Your Customer (KYC) protocols and transaction monitoring systems, to prevent illicit activity on their platforms.
Meanwhile, the Reserve Bank of India (RBI) is in advanced talks with several nations to expand its cross-border payment platform and establish seamless payment links across Asia.
Related: Reserve Bank Of India expands digital payments connectivity in Asia and Middle East
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