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Indian Crypto Exchanges Searched Amid Huge Tax Evasion

Indian Crypto Exchanges Searched Amid Huge Tax Evasion

Last updated 29th Jun 2022
Disclosure

Indian tax authorities have conducted a number of searches at some of India’s biggest cryptocurrency exchanges including CoinSwitch Kuber, CoinDCX, BuyUCoin and Unocoin. The searches have occurred after an alleged tax evasion of Rs 40.5 crore (approximately $6 million) was detected at cryptocurrency exchange WazirX.

On Dec. 30, a team of officers from the Goods & Services Tax and Central Excise of Mumbai East Zone (Indian tax authorities) tweeted:

“Officers of CGST Mumbai East comm’te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd.”

At the end of December, tax authority revealed details of the searches in a statement saying “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.”

The agency also made a warning stating that it “will cover all the cryptocurrency exchanges falling in Mumbai zone and will also intensify this drive in the coming days.”

WazirX explained that a lack of clarity in regulation caused the issue, saying that it’s “been diligently paying tens of crores worth of GST every month.”

WazirX then added: “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.”

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Following from the WazirX search, Mumbai’s Tax authority, along with DGGI, the national law enforcement agency under the Ministry of Finance responsible for fighting tax evasion in India, searched the offices of about six cryptocurrency service providers on New Year’s Day,

The DGGI recovered approximately $4 million worth of funds that resulted from alleged tax evasion during the crackdown on the cryptocurrency exchanges.

More than 50 officers conducted the searches and the exchanges cooperated without hesitation. 

Ruby Layram

Ruby Layram

Ruby is a writer for Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. Ruby has been a professional personal finance and investment writer for 2 years and is currently building her own portfolio of altcoins. She is currently studying Psychology at the University of Winchester, specialising in Statistical analysis.