Over half a dozen different cryptocurrency exchanges in India have been searched by tax authorities, according to reports made by CoinDesk last December 31, 2021. With an alleged tax evasion amount of 700 million rupees, popular platforms in the country such as CoinDCX, Unocoin and CoinSwitch Kuber among many others are being investigated.
However, the investigation began when tax authorities or the Goods & Services Tax and Central Excise (CGST) discovered that crypto exchange platform WazirX has an alleged tax evasion of 400 million rupees. This amount is equivalent to around $6 million, with other apparent transactions still unaccounted for.
Due to the discovery made by CGST, the Binance-owned WazirX is currently being investigated along with other popular crypto trading platforms in the country. The platform is still operational, but tax officials are continuing to investigate records and previous transactions.
India’s tax authority released a statement to the public via their official website last December 31 and discussed the current situation and plans to come. ‘The above case is a part of the special anti-tax evasion drive, which relies on intensive data mining and data analytics, initiated by the CGST Mumbai Zone’.
The announcement continues, ‘The CGST department will cover all the cryptocurrency exchanges falling in Mumbai zone and will also intensify this drive in the coming days’.
As a response to the accusations, WazirX’s management led by Zanmai Labs also issued their own statement last December 31 according to CoinDesk, pointing to lack of regulatory clarity as the cause of the issue as they have diligently paid all their dues before.
‘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. That being said, we strongly believe that regulatory clarity is the need of the hour for the Indian crypto industry’.
As of now, tax authorities in India are on the lookout for any other related activities when it comes to transactions with NFTs, online gaming or e-commerce as long as they use cryptocurrency as a mode of payment.
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