{"id":2177,"date":"2022-01-06T14:00:00","date_gmt":"2022-01-06T13:00:00","guid":{"rendered":"https:\/\/ancstockinvestments.com\/blog\/?p=2177"},"modified":"2022-01-06T10:42:17","modified_gmt":"2022-01-06T09:42:17","slug":"india-probes-binances-wazirx-crypto-exchange-for-tax-evasion","status":"publish","type":"post","link":"https:\/\/ancstockinvestments.com\/blog\/2022\/01\/06\/india-probes-binances-wazirx-crypto-exchange-for-tax-evasion\/","title":{"rendered":"India Probes Binance&#8217;s WazirX Crypto Exchange for Tax Evasion"},"content":{"rendered":"\n<div>\n<p class=\"cyhZ9\">India\u2019s tax authorities are going after <a href=\"https:\/\/www.coindesk.com\/markets\/2021\/12\/16\/indian-crypto-exchange-wazirxs-trading-volume-jumps-to-over-43b-in-2021\/\">the country\u2019s largest<\/a> cryptocurrency trading platform, WazirX, accusing it of tax evasion <a href=\"https:\/\/www.bloombergquint.com\/business\/wazirx-evaded-gst-alleges-tax-authority-crypto-exchange-blames-ambiguity\">worth 40.5 crore rupees<\/a> ($5.4 million).<\/p>\n<p class=\"cyhZ9\">The Mumbai office of the goods and services tax (GST) authority has been investigating the platform\u2019s business transactions <a href=\"https:\/\/www.pib.gov.in\/PressReleseDetailm.aspx?PRID=1786693\">and said on Dec. 31<\/a> that it has recovered Rs49.20 crore from WazirX in taxes and penalties. It is the first crypto-related tax evasion investigation in India.<\/p>\n<p class=\"cyhZ9\">The firm, which was bought by leading global exchange <a href=\"https:\/\/www.binance.com\/en\/blog\/all\/binance-acquires-indias-leading-digital-asset-platform-wazirx-to-launch-multiple-fiattocrypto-gateways-404105749895733248\">Binance in 2019<\/a>, meanwhile, says any alleged evasion was unintentional. But the investigation signals a <a href=\"https:\/\/indianexpress.com\/article\/india\/centre-works-on-tax-framework-to-regulate-cryptocurrencies-7630114\/\">new era for India\u2019s tax authorities<\/a>, with crypto a potential source of revenue as well as alleged fraud.<\/p>\n<h2 class=\"et6CV\">What WazirX is alleged to have done<\/h2>\n<p class=\"cyhZ9\">WazirX provides the option to transact in rupees or WRX, which are <a href=\"https:\/\/wazirx.com\/blog\/features-and-benefits-of-wrx-token-for-indian-traders\/\">utility tokens<\/a> introduced by Binance for trading cryptocurrencies. WRX tokens can only be purchased from the exchange. The firm charges a commission on each transaction from the buyer and the seller\u20140.2% for a rupee transaction and 0.1% on WRX.<\/p>\n<p class=\"cyhZ9\">The investigation showed that the platform earned commission on trading, deposit, and withdrawals through rupee and WRX transactions, according to a statement by the GST authority. But it paid taxes only on what it earned via the rupee transactions, and not on WRX.<\/p>\n<h2 class=\"et6CV\">WazirX\u2019s response<\/h2>\n<p class=\"cyhZ9\">Zanmai Labs, which owns the WazirX platform, said the alleged tax evasion was not intentional.<\/p>\n<p class=\"cyhZ9\">\u201cThere 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,\u201d it said in a statement. \u201cThere was and is no intention to evade tax.\u201d<\/p>\n<p class=\"cyhZ9\">Zanmai Labs also said the Indian cryptocurrency industry needs <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/how-much-tax-do-you-have-to-pay-for-cashing-out-on-crypto-investments\/articleshow\/87463834.cms\">clarity on tax regulations<\/a>.<\/p>\n<h5>Also Read:\u00a0<a href=\"https:\/\/ancstockinvestments.com\/blog\/2021\/12\/20\/what-is-the-current-status-of-indias-cryptocurrency-bill\/\" target=\"_blank\" rel=\"noopener noreferrer\">What is the Current Status of India\u2019s Cryptocurrency Bill?<\/a><\/h5>\n<h2 class=\"et6CV\">What is the problem with India\u2019s policy on crypto taxation?<\/h2>\n<p class=\"cyhZ9\">The investigation will cover all crypto exchanges in its zone, the Mumbai authority said, and extend to other emerging businesses like e-commerce, online gaming, and non-fungible tokens to identify possible tax evasion.<\/p>\n<p class=\"cyhZ9\">Meanwhile, India\u2019s crypto firms say they have been waiting for legislation of the virtual token industry for more than a year. The cryptocurrency bill had been listed for the winter session of parliament but it <a href=\"https:\/\/qz.com\/india\/2104075\/what-is-the-current-status-of-indias-cryptocurrency-bill\/\">was not tabled<\/a> because further deliberation was required.<\/p>\n<p class=\"cyhZ9\">Some of the key issues are whether cryptocurrency should be considered a commodity, an asset, or legal tender. Its classification would affect <a href=\"https:\/\/qz.com\/india\/2050148\/are-cryptocurrency-gains-taxable-in-india\/\">taxation<\/a> as well as protect investors from\u00a0fraud and other malpractice.<\/p>\n<p class=\"cyhZ9\">\u201cIndian tax laws are unclear about the implications of new-age digital transactions such as crypto, NFT, online gaming, etc,\u201d\u00a0says Jay Jhaveri, partner at\u00a0Mumbai-based accounting firm Bhuta Shah &amp; Co. \u201cThe weakness in Indian laws, especially GST, with its ever-evolving structure, is being exploited to the fullest by platforms that deal in new-age digital transactions.\u201d<\/p>\n<p class=\"cyhZ9\">Despite the firms\u2019 apparent confusion over applicable tax laws, the Directorate General of Goods and Services Tax Intelligence\u2014a law enforcement agency under the Ministry of Finance\u2014is scrutinizing multiple crypto firms, <a href=\"https:\/\/economictimes.indiatimes.com\/tech\/tech-bytes\/indias-cryptocurrency-platforms-lack-clarity-on-tax-provisions\/articleshow\/88677171.cms?from=mdr\">including Buyucoin and Unocoin<\/a>.<\/p>\n<\/div>\n\n<p><a href=\"https:\/\/qz.com\/india\/2108727\/india-probes-binances-wazirx-crypto-exchange-for-tax-evasion\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s tax authorities are going after the country\u2019s largest cryptocurrency trading platform, WazirX, accusing it of tax evasion worth $5.4 million.<\/p>\n","protected":false},"author":5,"featured_media":2178,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"content-type":"","inline_featured_image":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,3,10],"tags":[119,172,337,336],"series":[],"ppma_author":[533],"class_list":["post-2177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-investments","category-stock","tag-binance","tag-crypto-exchange","tag-taxation","tag-wazirx"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>India Probes Binance&#039;s WazirX Crypto Exchange for Tax Evasion<\/title>\n<meta name=\"description\" content=\"India\u2019s tax authorities are going after the country\u2019s largest cryptocurrency trading platform, WazirX, accusing it of tax evasion worth $5.4 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