The Directorate General of GST Intelligence (DGGI) has conducted searches at the offices of major cryptocurrency providers in the country, reported ANI. The development comes a day after the GST Mumbai East Commissionerate recovered ₹49.20 crore cash of evaded Good and Service Tax (GST) from renowned cryptocurrency provider WazirX.
While speaking to ANI, sources informed, “Around half dozen offices of Cryptocurrency Service providers have been searched and massive Goods and Service Tax (GST) evasion has been detected by DGGI. The DGGI is investigating Coinswitch Kuber by M/s Bitcipher Labs LLP, CoinDCX by M/s Neblio Technologies PVT. LTD., BuyUCoin by M/S I Block Technologies Pvt. LTD. and Unocoin by M/s Unocoin Technologies Pvt. LTD.”
Furthermore, they emphasised, “They are providing facilitation intermediary services for buying and selling of crypto coins. These services attract GST rate of duty of 18% which all of them have been evading.” ANI reported that although the cryptocurrency providers were charging a commission for bitcoin exchange, they were not paying GST.
After Cryptocurrency exchange WazirX, offices of major Cryptocurrency service providers across the country are searched by Directorate General of GST Intelligence officials. Massive tax evasion was detected by DGGI. More details awaited: Official Sources told ANI
— ANI (@ANI) January 1, 2022
Reportedly, the Directorate General of GST Intelligence (DGGI) investigated the transactions and confronted the service providers with evidence of tax evasion. ANI reported that the Mumbai CGST and DGGI had detected GST evasion to the tune of ₹70 crores.
GST recovered from WazirX, tax evasion detected
On Friday (December 31), Mumbai GST Commissionerate detected tax evasion to the tune of ₹40.5 crores by WazirX. The DGGI recovered ₹49.20 in cash as penalty, and interest for the evaded tax.
Mumbai #GST Commissionerate detects ₹ 40.5 crore GST evasion by #Cryptocurrency Exchange #WazirX
— PIB in Maharashtra 🇮🇳 (@PIBMumbai) December 31, 2021
Recovers ₹ 49.20 Crores in cash pertaining to #GST evaded, interest and penalty
📘https://t.co/5oo8BjO4ic pic.twitter.com/i24N7ocF61
Moreover, cryptocurrency managed by WazirX i.e WRX is owned by a Seychelles-based firm named M/s Binance Investment Co. Ltd. During the probe, it came to light that WazirX charged both buyers and sellers for each transaction, including trading, deposit, and withdrawal fees. WazirX used to charge 0.2% commission on rupee transactions but 0.1% commission on WRX transactions.
.@cgstmumbaizone is intensifying its investigation of business transactions related to emerging areas like e-commerce, online gaming, Non-Fungible Tokens etc. to identify the areas of possible tax evasion
— PIB in Maharashtra 🇮🇳 (@PIBMumbai) December 31, 2021
📘https://t.co/5oo8BjO4ic
It was found that the cryptocurrency service provider paid GST only on commission earned through rupees and not through WRX. “The 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,” it said in a press release. GST Mumbai Commissionerate will now probe tax evasion in emerging economic hubs such as online gaming and e-commerce.
