Thursday, January 20, 2022
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By Olivia Brooke
Published 20 mins ago Updated 20 mins ago

WazirX, a Binance-owned Indian cryptocurrency exchange, was recently found to be defaulting in its tax to the Indian government. Following a visit from the officers of India’s Goods and Services Tax and Central Excise (CGST) department on Monday, WazirX was deemed to be Rs.40.5 crore (about $6 million) short on its tax payments.

However, Zanmai Labs, the managers of WazirX, in a statement has said that it had no intent to evade taxes and had complied voluntarily with the tax authority to pay up its shortfall and iron out the misunderstanding.

According to a statement by a spokesperson for the exchange reported in the New Indian Express, the shortfall was a result of a misinterpretation of one of the components of the tax law which led to a difference in the calculation of their taxable amount.

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.

The spokesperson added that the exchange had been paying millions in GST tax consistently every month and blamed the incident with the tax authority on the lack of regulatory clarity for the crypto-industry in India.

It will also provide us with more clarity on taxation so that we can work in sync with the lawmakers, and continue to be a responsible industry player,” the spokesperson said about the need for regulatory clarity.

India’s continued lack of regulatory clarity for crypto

CoinSwitch Kuber, CoinDCX, BuyUCoin, and Unocoin which are some of the other big crypto exchanges in India were also paid a simultaneous visit along with WazirX. The move came after the tax body released a statement that they had detected that WazirX’s tax filings were incomplete.

During the investigation it came to notice that the firm used to collect revenue from commission as trading fees, deposit fees, and withdrawal fees. It was paying GST only  on commission earned in rupee but was not paying GST on commission earned in WRX.

However, it cannot be denied that India still lacks clarity on crypto regulation. For some key players in the Indian crypto industry, the move by the GST authorities is an attempt to come up with their interpretation of the country’s tax laws as applied to crypto.

“They are coming up with their own explanations. Not everything is named in law and how to be taxed but we presume that certain goods are treated in a particular way.” Rameesh Kailasam, president and CEO of tech lobby IndiaTech, told the New Indian Express.

In the past, India has even threatened to ban the industry entirely. However, the industry may soon get some relief from the regulatory uncertainty as there is a cryptocurrency bill on the table of the country’s parliament that seeks to provide clear regulations for the crypto industry.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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