WazirX, CoinDCX, CoinSwitch Kuber amongst others make up the 11 crypto exchanges charged with tax evasion by the Indian government. A total of Rs 95.86 crore ($12.58 million) was seized from the exchanges for dodging the Goods and Services Tax (GST).
On March 28, Minister of State for Finance Pankaj Chaudhary reported a GST evasion recovery of 81.54 crores ($10.70 million) from 11 crypto exchanges in a written response to a question in India’s Lok Sabha. In addition, interest and penalty costs were collected, totalling 95.86 crores in tax revenue.
Zanmai Labs (WazirX), CoinDCX, CoinSwitch Kuber, Buy Ucoin, UnoCoin, Flitpay, Zeb IT Services, Secure Bitcoin Traders, Giottus Technologies, Awlencan Innovations India (Zebpay), and Discidium Internet Labs are among the crypto exchanges under scrutiny by the GST.
On a query regarding the number of crypto exchanges operating in the country, Chaudhary said the ministry does not collect such data. The largest tax evasions are by crypto exchanges WazirX, CoinDCX, and CoinSwitch Kuber of ₹40.51 crore, ₹15.70 crore, and ₹13.76 crore, respectively.
Furthermore, government inspectors detected the collection of revenue from commissions as trading fees, deposit fees, and withdrawal fees during the GST evasion inquiry.
The founder of the blockchain ecosystem 5ireChain, Pratik Gauri, said: “The government is attempting to have a better grasp of the many problems it will face in putting regulations in place once they are in place.”
India’s Position on crypto regulation
The Indian government has maintained its anti-cryptocurrency and anti-regulation position. The government, on the other hand, will investigate technological breakthroughs using blockchain technology. Finance Minister Nirmala Sitharaman announced a 30% tax on bitcoin or virtual digital assets during the February 2022-23 budget.
Despite opposition from Indian crypto users, the Indian Parliament just passed the Finance Bill 2022, approving the 30% crypto tax and an additional 1% tax deducted at source (TDS).