Indian Authorities Detect Tax Evasion of ₹700 Million, Investigating Top Crypto Exchanges
A major crackdown on cryptocurrency exchanges in India has revealed significant tax evasion, with authorities investigating alleged irregularities amounting to ₹700 million (approximately $9.3 million USD). This investigation involves searches of over half a dozen crypto exchanges across the country.
GST Crackdown Uncovers Widespread Evasion
The Directorate General of Goods and Services Tax Intelligence (DGGI) and Central Goods and Services Tax (CGST) Mumbai Zone are at the forefront of this investigation. They have so far charged 17 cryptocurrency exchanges with dodging the tax to the tune of INR 824.14 Cr. Their efforts have already led to the detection of around Rs 70 crore worth of tax evasion during the crackdown on Cryptocurrency trade by Mumbai CGST and DGGI.
Indian authorities initially revealed $97 million in tax evasion by crypto exchanges, including prominent players like Binance and WazirX, as part of an ongoing GST crackdown. Specific allegations include:
- Binance: Facing scrutiny over $480 million in transaction fees reportedly funneled to Nest Services Ltd and faces $86M in unpaid GST demands.
- WazirX: Accused of GST evasion of ₹405 million, with authorities recovering ₹492 million in cash.
Details of the Investigation
The scale of the operation is significant. Two agencies, five months, five crypto exchanges, and over 100 officers have been involved. While India initially aimed to regulate crypto, plans were postponed, leaving GST as a key tool for enforcing financial compliance. This large-scale investigation underlines the complexities of regulating the crypto market and ensuring tax compliance.
The ANI story states that authorities detected total tax evasion from the six crypto-related businesses of around US$9.3 million (INR 700 million) and the same amount. The alleged 700 million rupee tax evasion is under investigation, with over half a dozen crypto exchanges in India being searched. DGGI searches around half a dozen offices of cryptocurrency businesses.
This development highlights the ongoing efforts of India’s Goods and Services Tax (GST) authorities to clamp down on tax evasion within the rapidly growing cryptocurrency sector.