Indian Cryptocurrency Exchange Platform WazirX Come Under the Lens of GST Authorities
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The WazirX of Indian cryptocurrency exchange platform has come in the eyes of the Goods and Services Tax department, which has said it had paid tax worth Rs 40.5 crore. The department said that it has started an investigation under the circumstances. The Mumbai CGST department area also notified that it has collected Rs 49.2 crore in cash in the form of GST, interest, and penalties. The news comes amid reports that the Center is set to regulate the cryptocurrency in India, which currently enjoys a free flow in the country. The Center should do this by first introducing a new bill. The officials of CGST Mumbai East Committee detected GST evasion of Rs 40.5 crore.
The CGST department said that WazirX has launched its cryptocurrency called WRX Coin, but has not paid GST on it. He claimed that the platform had launched the coins through Zamanai Labs Pvt Ltd. According to a report in Economic Times, the indirect tax department said that they attract 18 per cent GST on launching a new crypto coin.
WazirX has launched its cryptocurrency called WRX Coin
Image Credit: Bloomberg
According to the tax department Zanmai Labs controls cryptocurrency exchange operations for WazirX in India. WazirX and its cryptocurrency WRX Coin are owned by Binance Investments, a Seychelles-based company.
Amidst talks of bringing in new laws regulating these digital tokens, this is the first time that a crypto trading platform has been investigated by the Indian government. Investigators handling the case said that WazirX offers crypto trading and investing on its platform in two ways- through Indian Rupee and WRX coins.
As per the report, officials found that the company was paying tax for transactions done through Rupee, which attracts 0.2 percent commission from users. When traders choose to transact in WRX coins, the commission charged 0.1 percent of the trading volume and they were not paying GST on this commission.
Zanmai Labs stated that there was ambiguity in the interpretation of one of the components, resulting in a differing GST calculation, according to the sources. “Zanmai Labs Pvt Ltd. paying GST worth tens of crores diligently every month. Due to ambiguity in the interpretation of one component, the GST paid was calculated separately. However, to be cooperative and compliant, we voluntarily paid additional GST. A spokesperson for Zanmai Labs told that there was no intention to avoid the tax.
The Center as well as the RBI have recently expressed apprehensions about the 'threats' of the cryptocurrency, which clearly poses a threat and could potentially increase the number of frauds in the country. To curb these, the government will soon bring in a law to regulate how crypto exchanges are done in India.
