Indian tax Authorities have conducted a series of searches on some of the largest cryptocurrency exchanges in India, including CoinSwitch Kuber, CoinDCX, BuyUCoin, and Unocoin. The searches have come after an alleged tax evasion of Rs 40.5 million (approximately $ 6 million) was detected on cryptocurrency exchange WazirX.
On December 30, a team of officials from East Mumbai Central Excise Tax and Goods and Services Tax (Tax Authorities of India) tweeted:
โCGST Mumbai East comm'te officers have detected GST Evasion of Rs 40.5 Cr. Commission from Wazir X Crypto Currency and recovered Rs 49.2 Cr. In cash as GST, interest and penalty today 12/30/2021 from Zanmai Labs Pvt. Limited."
In late December, the tax authority disclosed details of the searches in a statement saying that "the case is part of the special campaign against tax evasion, which relies on intensive data mining and data analysis, initiated by CGST Mumbai Zone ".
The agency also made a warning stating that it will "cover all cryptocurrency exchanges falling in the Mumbai area and will also intensify this momentum in the coming days."
WazirX explained that the lack of clarity in the regulation caused the problem, saying that it "has been diligently paying tens of millions of rupees in GST every month."
WazirX then added: โThere was an ambiguity in the interpretation of one of the components that led to a different calculation of the GST paid. However, we voluntarily pay additional GST to cooperate and comply. There was no intention to evade taxes. That said, we strongly believe that regulatory clarity is the need of the moment for Indians. crypto industry."
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Following the WazirX search, the Mumbai Tax Authority, together with DGGI, the national law enforcement agency under the Ministry of Finance responsible for combating tax evasion in India, searched the offices of some six cryptocurrency service providers on New Years Day,
The DGGI recovered approximately $ 4 million in funds that resulted from alleged tax evasion during the crackdown on cryptocurrency exchanges.
More than 50 officers conducted the searches and the exchanges cooperated without hesitation.
