January 3, 2022
The Goods & Services Tax (GST) department has penalised cryptocurrency exchange WazirX Rs 49.20 crore for evading legal taxes, officials said.
The GST Mumbai (East Commissionerate Zone), while investigating the business activities of cryptocurrency exchange WazirX, detected GST evasion of Rs 40.5 crore. In a statement, the agency said that they have recovered Rs 49.20 crore in cash from the firm which includes interest and penalty.
WazirX exchange is managed by Zanmai Labs Private Limited Ltd and cryptocurrency WRX is owned by Binance Investment Co. Ltd, Seychelles.
The exchange provides options to a trader to transact in Rupee or WRX. The WRX has to be purchased from the WazirX platform.
“The taxpayer is charging commission on each transaction in cryptocurrency from buyer and seller both. However, the rate of commission is different for both the transactions. The transaction in rupee attracts a commission of 0.2% and transaction in WRX attracts a commission of 0.1%,” said the agency in a statement.
The department has alleged that during the investigation, it came to the notice of officials that the taxpayer used to collect revenue from 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% is applicable on these transaction fees. GST of Rs 40.5 crore was not paid, which was paid along with interest and penalty on December 30, 21. Total Rs 49.20 crore have been recovered on the spot from the WazirX,” added the statement.
The penalty has been imposed as part of the special anti-tax evasion drive, which relies on intensive data mining and data analytics, initiated by the CGST Mumbai Zone.
The officers of the Central GST Mumbai zone are investigating business transactions related to emerging economic space like e-commerce, online gaming, Non-Fungible Tokens to identify the areas of possible tax evasion.
Source: India Today