Cryptocurrency exchange WazirX fined Rs 49.20 crore for GST evasion

Officials said that GST of Rs 40.5 crore was not paid by popular cryptocurrency exchange, WazirX. Along with interest and penalty, a total of Rs 49.2 crore was recovered from the exchange.

New Delhi:The GST officials on Friday said the Mumbai Commissionerate, while investigating the business activities of a cryptocurrency exchange, WazirX, detected GST evasion of Rs 40.5 crore.

"The GST of Rs 40.5 crore was not paid. Along with interest and penalty, on December 30, a total of Rs 49.2 crore has been recovered from WazirX," a GST official said.

"WazirX exchange is managed by Zanmai Labs Pvt. Ltd and cryptocurrency WRX is owned by Binance Investment Co. Ltd, Seychelles.

"The exchange provides option to a trader to transact in Rupee or WRX. The WRX has to be purchased from WazirX platform. The company was charging commission on each transaction in cryptocurrency from buyer and seller both. But they were not paying the tax to Government," the official said.

The Goods and Services Tax (GST) officials also found that the rate of commission was different for both the transactions.

"The transaction in rupee attracts the commission of 0.2 per cent and transaction in WRX attracts the commission of 0.1 per cent," said the official

During the investigation, it came to notice that the company used to collect revenue from commission as trading fees, deposit fees and withdrawal fees.

The company 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 this transaction fees.

The case was a part of the special anti-tax evasion drive, which relies on intensive data mining and data analytics, initiated by the CGST Mumbai Zone.

"The CGST department will cover all the cryptocurrency exchanges falling in Mumbai zone and will also intensify this drive in the coming days," the official said.

IANS

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