Indian Cryptocurrency Exchange WazirX Fined $7mln for Tax Evasion
Officials from Indias Goods and Services Tax (GST) department have announced that cryptocurrency exchange WazirX has been fined around $7 million for dodging valid taxes. While conducting an investigation into the business operations of cryptocurrency exchange WazirX, the GST Mumbai (East Commissionerate Zone) discovered GST dodging to the tune of around $6 million.The agency stated that they had collected a total of $7 million in cash from the company, which included interest and penalties.
It is administered by Zanmai Labs Private Limited, and the cryptocurrency WRX is held by Binance Investment Co. Ltd, a company based in the Republic of Seychelles. A trader has the option of transacting in either Rupee or WRX via the exchange. WRX can be bought through the WazirX platform.
“The taxpayer takes a percentage on each bitcoin transaction, which is collected from both the transacting parties.” The percentage of commission, on the other hand, differs for buying and selling transactions. The transaction in rupees is subject to a 0.2 percent charge, whereas the transaction in WRX is subject to a 0.1 percent commission.
Officials at the government were allegedly made aware of the taxpayer’s revenue collection practises while conducting an inquiry. According to the agency, the fim was generating revenue in the form of trading fees, withdrawal and deposit charges.
“The crypto exchange was only paying GST on commissions made in rupees, and was not remitting GST on commissions earned in WRX. Furthermore, the transaction costs will incur a 18% GST Unpaid taxes were Rs. 40.5 crore, which were eventually paid, together with interest and penalties, on December 30, 2021. The WazirX was apprehended and a sum of Rs 49.20 crore was seized on the spot.”
The penalty was enforced as portion of a specific anti-tax evasion effort, which depends on extensive data mining and crunching, and was undertaken by the Central Government of India’s Mumbai Zone, to combat tax evasion. The officers of the Central GST Mumbai zone are conducting investigations into commercial transactions using developing economic spaces like as e-commerce, online gaming, and Non-Fungible Tokens in order to discover potential tax evasion opportunities.