WazirX evaded ₹40.5 crore in tax: GST department

WazirX evaded ₹40.5 crore in tax says the GST department of India. Let us find out why they made such a claim.

Introduction

The Goods and Services Tax (GST) department of India is suspicious about WazirX allegedly committing tax Evasion. They have launched an investigation to probe the activities of WazirX tax Evasion.

The allegations

The allegation on WazirX is that they tried to evade from paying ₹40.5 crore (approximately $5.4 million) in taxes owed to the state of India. On the 30th of December 2021, the tax department recovered ₹49.2 crore from the company. This amount is the GST owed plus interest and penalties.

The allegations were raised by the indirect tax department of India. They claimed that the company has issued its own cryptocurrency, the WRX coin. However, they did not pay GST on it. The tax department alleged that a GST of 18% was applicable on these coins, which was not paid by the company.

The accused

Zanmai Labs, the entity behind the WRX coin manages the company’s Cryptocurrency exchange. Additionally, both the entities, WazirX and Zanmai labs have the same parent organization, Binance Investments.

Users can trade Cryptocurrencies using Indian rupees or WRX coins on WazirX. If a trader chooses to buy Cryptocurrencies using Indian rupees, Wazirx charges a 0.2% commission on the trade. However, when’s trader choses to buy Cryptocurrencies using WRX coins, the company charges a 0.1% commission on the trade. The tax department claims that the company WazirX hasn’t paid taxes related to this. The tax department said that “In cases where the trader opts for transaction in WRX coins, the commission charged is 0.1% of trading volume and they were not paying GST on this commission.”

Comments by the accused party

WazirX’s management are yet to make a statement on this issue. However, Zanmai Labs released a statement on this issue. A spokesperson from the company commented that the firm has been paying GST monthly and there might be some ambiguous thoughts related to the interpretation of the framework of taxation. “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,” he said.

Regulations and Taxes

Unfortunately, as of now, there is no framework related to Cryptocurrencies in India. This can be blamed partially for the ambiguity in taxation which we see in here. Hopefully, we might get a structured regulatory environment soon. This will resolve issues like this.

Conclusion

WazirX evaded ₹40.5 crore in tax says the GST department of India. Currently, the investigation is still underway. However, we will find out everything related to this event soon.

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