WazirX, Coin DCX and CoinSwitch Kuber among companies under investigation, Parliament is told
The Centre has recovered around Rs 95.86 crore from at least 11 crypto exchanges for evading goods and services tax (GST), according to data released by Parliament on Monday.
The amount includes interest and penalty.
The GST investigation department has detected a total tax evasion of Rs 81.54 crore by crypto exchanges that include WazirX, Coin DCX, CoinSwitch Kuber, Buy Ucoin, UnoCoin and Flitpay, among other exchanges.
In a written reply to Lok Sabha, minister of state (MoS) for finance Pankaj Chaudhary said 11 cases of GST evasion by cryptocurrency exchanges have been detected by central GST formations.
Others were Zeb IT Services, Secure Bitcoin Traders, Giottus Technologies, Awlencan Innovations India (Zebpay) and Discidium Internet Labs, according to the MoS.
Of the 11 exchanges, Zanmai Labs, which operates as WazirX, evaded Rs 40.5 crore, the highest amount evaded.
Notably, WazirX is managed by Zanmai Labs and cryptocurrency WRX is owned by Binance Investment Co, Seychelles.
The total recovery was about Rs 49.18 crore from the exchange, which includes interest and penalty.
The exchange provides options to a trader to transact in rupee or WRX and WRX has to be purchased from the WazirX platform.
GST officials detected the evasion in January following the show-cause notice served to WazirX in 2021.
Officials allege that the exchange was charging commission on each transaction in cryptocurrency from both the buyer and seller.
But it was not paying the tax to the government.
The department had observed that the exchange used to collect revenue from commission as trading fees, deposit fees and withdrawal fees.
“Zanmai Labs has been diligently paying crores in GST every month. There 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. There was and is no intention to evade tax, a company spokesperson said.
Coin DCX was the second-largest evader with Rs 15.70 crore followed by CoinSwitch Kuber (Rs 13.76 crore) and Giottus Technologies (Rs 3.85 crore). These exchanges paid back Rs 16.07 crore and Rs 3.50 crore, respectively, including interest and penalty, according to the minister’s reply.
GST officials have been investigating business transactions related to e-commerce, online gaming and non-fungible tokens to identify the areas of tax evasion.
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