Crypto platforms lack clarity on tax provisions: Industry – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/economy/finance/crypto-platforms-lack-clarity-on-tax-provisions-industry/articleshow/88677521.cms

SynopsisAfter the Goods and Services Department, which slapped a ₹40 crore GST demand on crypto exchange WazirX last month, the Directorate General of Goods and Services Tax Intelligence (DGGI) – under the ministry of finance – is scrutinising multiple crypto firms including Buyucoin and Unocoin.

Cryptocurrency platforms that are facing increased scrutiny from tax authorities for Goods and Services Tax (GST) evasion are unclear about “applicable provisions” under the country’s indirect tax regime amid regulatory uncertainty, industry executives told ET.

After the Goods and Services Department, which slapped a ₹40 crore GST demand on crypto exchange WazirX last month, the Directorate General of Goods and Services Tax Intelligence (DGGI) – under the ministry of finance – is scrutinising multiple crypto firms including Buyucoin and Unocoin.

Industry said crypto platforms have failed to pay the precise GST amount due to confusion over the tax applicable on different business models adopted by them.

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Exchanges like WazirX and CoinDCX that facilitate peer-to-peer deals and charge a commission on each transaction, count this as their main source of revenue. Others such as Unocoin and CoinSwitch Kuber also act as broker or aggregator and buy and sell cryptocurrency to users, in turn making profits on these trades, a model that is stoking greater regulatory scrutiny, executives said.

“They (DGGI) are looking at the different models and asking us for an explanation on how we account for transactions and they’re collecting the GST that was missed,” said Sathvik Vishwanath, cofounder of Unocoin, who said there were “some business model categorisation issues because of which it was unclear how much tax the (crypto) exchanges need to pay”.

(Originally published on Jan 04, 2022, 06:12 AM IST)

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