Binance tops list of 17 crypto entities probed for tax evasion in India

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As a seasoned analyst with years of experience under my belt, it’s clear that the tax compliance landscape in the cryptocurrency sector is as complex and dynamic as the blockchain itself. The latest revelation about Binance’s significant role in India’s Goods and Service Tax evasion is certainly a turning point in this saga.

As a researcher, I have come across findings that reveal my Binance account is associated with a significant portion of the reported Goods and Services Tax (GST) evasion cases among the registered cryptocurrency exchanges in India, as per the Indian Finance Ministry’s data.

In response to a parliamentary inquiry about tax compliance by cryptocurrency exchanges, Minister of State for Finance Pankaj Chaudhary disclosed that these entities collectively failed to pay an estimated ₹824.14 crore ($96 million) in Goods and Services Tax (GST). The Binance group company was reported as being responsible for the largest portion of this unpaid tax amount.

The Ministry reports that 47 Virtual Digital Asset Service Providers have signed up as reporting entities with the Financial Intelligence Unit. Among these, 17 providers were scrutinized due to suspected tax evasion under the Goods and Services Tax (GST) system.

Nest Services Limited, a business owned by Binance Group located in Seychelles, was found to have avoided paying approximately INR 722.43 crore (equivalent to about $85 million) in Goods and Services Tax (GST), according to the Indian Finance Ministry. This makes Nest Services Limited one of the largest offenders contributing to the overall GST evasion detected by the ministry.

As a researcher delving into the intricacies of financial transactions, I’ve uncovered some striking findings about WazirX, a digital asset exchange owned by Zanmai Labs Pvt. Ltd. It appears that this platform has allegedly failed to comply with a significant amount of Goods and Services Tax (GST) worth approximately ₹40.51 crore.

As a crypto investor, I’ve noticed that the government has successfully recouped approximately ₹122.29 crore in total from all involved parties, factoring in both interest and penalties. However, it’s worth noting that no recovery efforts have been reported yet from the entity connected to Binance, despite the allegedly larger sum of evaded funds associated with it.

Under the Goods and Services Tax (GST) system, which is a unified tax applicable across the country, businesses produce, sell, and consumers use various goods and services are all subject to this tax. Any foreign entities offering services within India must register under the GST system and fulfill their tax responsibilities accordingly.

Previously, crypto.news had shared that the Directorate General of Goods and Services Tax (GST) Intelligence in Ahmedabad issued a notice to Nest Services in August. This was after they discovered that funds collected as fees from Binance’s operations were being deposited into accounts managed by the company.

Binance reportedly accumulated over 4,000 crores (approximately $476 million) from transaction fees before it was required to cease operations and complete registration. Later, in August, they complied with the regulations and registered as a reporting entity under the Financial Intelligence Unit, following the payment of a $2.25 million fine for unlicensed operation.

To tackle tax evasion concerns, Binance seems to have designated a point person for collaboration with the relevant authority. Simultaneously, the platform has been proactively aiding Indian law enforcement in suppressing unlawful actions.

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2024-12-04 10:03