Top Cryptocurrency Providers In India Raided As Massive Tax Evasion Of Rs 70 Crore Detected
The offices of the top Cryptocurrency service providers were being searched by Directorate General of GST Intelligence officials today across the country. According to ANI official sources have told the news agency that a massive tax evasion was detected by DGGI.
"Around half dozen offices of Cryptocurrency Service providers have been searched and massive Goods and Service Tax (GST) evasion has been detected by DGGI," sources told ANI.?Crypto wallet and exchange are platforms where merchants and consumers can transact with digital assets like bitcoin, ethereum, ripple, etc.
What is happening?
According to sources, around ? 70 crore worth of tax evasion has been detected during the crackdown on Cryptocurrency trade by Mumbai CGST and 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," sources said.Official sources further said, "They are providing facilitation intermediary services for buying and selling of crypto coins. These services attract GST rate of duty of 18 per cent which all of them have been evading."
Another official source, who was part of this search, told ANI, "These service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax. These transactions were intercepted by DGGI and they were confronted with evidence that proved non-payment of GST."
The WazirX case
This comes after?GST Mumbai East Commissionerate of Mumbai Zone detected a GST evasion worth ?40.5 crores on Friday. The officials recovered ?49.20 crores in cash pertaining to GST evaded, interest and penalty from the cryptocurrency exchange WazirX.??
The detection was made while investigating the business activities of the exchange, which is managed by Zanmai Labs Pvt. Ltd and cryptocurrency WRX is owned by Binance Investment Co. Ltd, Seychelles, as per a press release.
According to the release, this exchange provides an option to the trader to transact in rupee or WRX. The WRX have to be purchased from the WazirX platform. The Taxpayer is charging commission on each transaction in cryptocurrency from both the buyer and the seller, it said.
How did they evade tax?
"However, the rate of commission is different for both transactions. The transaction in rupee attracts the commission of 0.2 per cent and the transaction in WRX attracts the commission of 0.1 per cent," added the release.
During the investigation, it came to notice that the taxpayer used to collect revenue from the commission as trading fees, deposit fees and withdrawal fees. The taxpayer was paying GST only on commission earned in rupee but was not paying GST on commission earned in WRX.
A GST at the rate of 18 per cent is applicable on these transaction fees. GST of Rs. 40.5 crores was not paid, which was paid along with interest and penalty on December 30. Total Rs. 49.2 crores have been recovered on the spot from the WazirX.
Officials tighten noose on web transactions?
The officers of CGST Mumbai zone are investigating business transactions related to emerging economic spaces like e-commerce, online gaming, Non-Fungible Tokens to identify the areas of possible tax evasion.
"The CGST department will cover all the cryptocurrency exchanges falling in the Mumbai zone and will also intensify this drive in the coming days," stated the release.?
