FinMin Reveals Crypto Exchanges Evaded GST Worth Rs 824 Crore

A written reply in Parliament by Minister of State for Finance Pankaj Chaudhary revealed that the authorities found exchanges such as CoinDCX and CoinSwitch Kuber evading taxes

M/s Zanmai Labs Pvt Ltd, that operates WazirX, was found to be evading GST worth Rs 40.51 crore, out of which officials recovered Rs 49.18 crore including interest and penalty.

Source : Cleartax

The government found that crypto exchanges evaded goods and services tax (GST) worth Rs 824.14 crore, a senior government official said. A written reply in Parliament by Minister of State for Finance Pankaj Chaudhary on Monday revealed that the authorities found exchanges such as CoinDCX, WazirX, Binance, and CoinSwitch Kuber evading taxes and managed to recover only Rs 122.29 crore. 

The Binance group firm, M/s Nest Services Limited, accounted for the largest amount of tax evasion worth Rs 722.43 crore, however, no recovery has been made yet by the finance ministry, reported Business Standard.

M/s Zanmai Labs Pvt Ltd, that operates WazirX, was found to be evading GST worth Rs 40.51 crore, out of which officials recovered Rs 49.18 crore including interest and penalty. Meanwhile, CoinDCX and CoinSwitch Kuber evaded GST worth Rs 16.84 crore and Rs 14.13 crore respectively, while the government managed to recover Rs 20.86 crore from CoinDCX and Rs 19.38 crore from the latter.

The ministry said 47 Virtual Digital Asset Service Providers (VDA SPs) were registered as reporting entities with the Financial Intelligence Unit-India under the Prevention of Money Laundering Act, 2002.

Notably, cryptocurrencies are defined as ‘Virtual Digital Assets’ (VDA) under Section 2(47A) of the Income Tax Act, and this includes most crypto assets, apart from gift cards or vouchers. Income from cryptocurrency transactions is charged a tax rate of flat 30 per cent, along with a 1 per cent tax deducted at source (TDS) on transactions surpassing Rs 50,000 annually. 

Since March 2023, crypto assets have been included in the Prevention of Money Laundering Act (PMLA) and this makes it mandatory for exchanges and crypto service providers to comply with the anti-money laundering standards, such as Know Your Customer (KYC) requirements. The enforcement of these norms is overseen by the Financial Intelligence Unit-India.