₹95.86 crore recovered from 11 Crypto exchanges for GST evasion.

Mar 28, 2022 01:00 pm

A total of ₹95.86 crore, including interest and penalty has been recovered by the central government from 11 crypto exchanges for evading Goods and Services Tax (GST). This was mentioned by Pankaj Chaudhary, minister of state for finance, told the Parliament in a written response to a question.

Asked whether the government has any data regarding the number of cryptocurrency exchanges in the country, Chaudhary said the Centre does not collect such data.

According to Chaudhary, a few cases of evasion of GST by cryptocurrency exchanges were detected by central GST formations. The agencies unearthed a total evasion of ₹81.54 crore by crypto exchanges. The timeline for these investigations was not revealed in the response.

The biggest evasion was detected at Zanmai Labs Pvt. Ltd, which operates under the brand WazirX. The quantum of evasion was ₹40.51 crore, and the recovered amount was ₹49.18 crore.

In December 2021, Central Goods and Services Tax (CGST) under the Central Board of Indirect Taxes and Customs (CBIC) department said it had detected GST evasion of ₹40.5 crore on commission earned by India’s leading crypto exchange WazirX.

The indirect tax department has contended that WazirX issued its own cryptocurrency, WRX coins, but did not pay the applicable 18% GST on these coins. The GST rate for services in the financial sector is 18%.

In a response, a WazirX spokesperson had then said, “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. It will also provide us with more clarity on taxation so that we can work in sync with the lawmakers, and continue to be a responsible industry player."

Meanwhile, as per the government on Monday, Coin DCX came second on the list with an evasion ₹15.70 crore. The exchange paid back ₹17.10 crore, which interest and penalty.