The GST Mumbai East Commissionerate of Mumbai Zone found GST evasion worth Rs 40.5 crore on Friday and received Rs 49.20 crore back in cash in relation to evaded GST, interest and penalties from the WazirX cryptocurrency exchange.
According to a press release from the commissioner’s office, the discovery came during an investigation into the business activities of the exchange, which is managed by Zanmai Labs and the cryptocurrency WRX is owned by Binance Investment, Seychelles.
According to the press release, this exchange offers the trader the option to trade in rupees or WRX. The WRX must be purchased from the WazirX platform. The taxpayer collects a commission from both the buyer and seller for every transaction in cryptocurrency, it said.
“However, the commission rate is different for the two transactions. The rupee transaction attracts a commission of 0.2 percent and the transaction in WRX attracts a commission of 0.1 percent,” the press release added.
The investigation found that the taxpayer used to collect income from the commission in the form of trading fees, deposit fees and withdrawal fees. The taxpayer only paid GST for the commission earned in rupees, but did not pay GST for the commission earned in WRX. A GST of 18 percent is charged on these transaction fees. GST of Rs. 40.5 crore was not paid which was paid along with interest and penalty on December 30th. A total of Rs. 49.2 crore was recovered from the WazirX on the spot. Further investigations are ongoing.
The above case is part of the special anti-tax evasion campaign, which is based on intensive data mining and data analysis and was initiated by the CGST Mumbai Zone. CGST Zone Mumbai officials are investigating business transactions related to emerging economies such as e-commerce, online gaming and non-fungible tokens to identify areas of potential tax evasion.
“The CGST division will cover all cryptocurrency exchanges that fall into the Mumbai zone and will intensify these efforts in the coming days,” the statement said.
The investigation into the case is ongoing.
Interested in cryptocurrency? We discuss everything about crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music, and anywhere you get your podcasts.
Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended as financial advice, trading advice, or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for losses that may arise from an investment based on perceived recommendations, forecasts or other information contained in the article.