WazirX, India’s largest cryptocurrency trading platform, has been accused of tax evasion worth 40.5 crore rupees ($5.4 million) by the country’s tax authorities.
The GST authority’s Mumbai office has been investigating the platform’s business operations and said on Dec. 31 that it has recovered Rs49.20 crore in taxes and penalties from WazirX. It’s the country’s first crypto-related tax evasion inquiry.
Meanwhile, the company, which was acquired by Binance, a renowned global exchange, in 2019, claims that any claimed evasion was inadvertent. However, the inquiry heralds a new age for India’s tax officials, with cryptocurrency serving as both a possible source of revenue and a potential source of fraud.
WazirX allows users to deal in either rupees or WRX, which are Binance’s utility tokens for cryptocurrency trading. The exchange is the only place where you may buy WRX tokens. The buyer and seller each pay a commission to the company. Which is 0.2 percent for rupee transactions and 0.1 percent for WRX transactions.
According to a statement released by the GST office, the platform earned commission on trading, deposits. Then, and withdrawals using rupee and WRX transactions. However, it only paid taxes on the money it made from rupee transactions, not on WRX.
The suspected tax evasion was not intentional, according to Zanmai Labs, which owns the WazirX platform.
“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,”
Then, it says in a statement. “There was and is no intention to evade tax.”
Also, Zanmai Labs says the Indian cryptocurrency industry needs clarity on tax regulations.