Tax Evasion is being Investigated at Eleven Cryptocurrency Exchanges

Tax Evasion is being Investigated at Eleven Cryptocurrency Exchanges

 

The Indian government has confirmed that the country's tax office is investigating eleven cryptocurrency exchanges. They were found guilty and were fined 95.86 crore rupees ($12.6 million).

The Indian government answered some questions regarding the taxation of cryptocurrency exchanges on Monday in the Lok Sabha, the lower house of parliament. Parliament member S. Ramalingam asked the finance minister "whether it is true that some cryptocurrency exchanges were involved in evasion of goods and services tax (GST) and it was also detected that other cryptocurrency exchanges and major investors in digital currencies are under investigation by the government."

The parliamentarian further inquired whether "the government's action taken or proposed to be taken against those cryptocurrency exchanges were detected in GST evasion."

The minister of state in the ministry of finance, Pankaj Chaudhary, replied:

A few cases of evasion of goods and services tax (GST) by cryptocurrency exchanges have been detected by central GST formations.

He revealed that eleven cryptocurrency exchanges were investigated and tax evasion in the amount of 81.54 crore rupees was detected. The tax authority has recovered 95.86 crore rupees, including interest and penalties. The minister of state provided a list of the eleven exchanges investigated:

• Coindcx

• Buyucoin

• Coinswitch Kuber

• Unocoin

• Flitpay

• Zeb IT Services (Zebpay)

• Secure Bitcoin Traders

• Giottus Technologies

• Awlencan Innovations, India

• Wazirx

• Discidium Internet Labs

The exchanges with the most evasion detected were Wazirx, Coindcx, and Coinswitch Kuber, according to the list.

MP Ramalingam also asked the finance minister "whether the government has any data regarding the number of cryptocurrency exchanges that are presently involved in the cryptocurrency exchange business in the country."

Minister Chaudhary replied:

The government does not collect any data on cryptocurrency exchanges.

Meanwhile, Indian Finance Minister Nirmala Sitharaman has proposed a 30% tax on cryptocurrency income and a 1% tax deducted at source (TDS) on all cryptocurrency transactions. A member of parliament had recently requested the government to reconsider applying the 1% TDS.  He claimed that it would effectively eliminate the crypto asset class.

Another member of the Indian parliament has now requested the government to raise the tax rate on cryptocurrency income from the current rate of 30%, claiming that cryptocurrency trading is similar to gambling. He has also asked for a goods and services tax (GST) to be levied on the whole value of crypto transactions.

India’s Finance Bill 2022 containing the proposed 30% tax on crypto income is now being considered in the Rajya Sabha, the upper house of India’s parliament. MP Sushil Kumar Modi reportedly asked the government on Monday to increase the tax on cryptocurrency income from the current rate of 30%.

He went on to say that, unlike stocks, which are backed by companies, "crypto is gambling."

The parliamentarian went on to say that the 18 percent goods and services tax (GST) only applies to crypto service providers such as exchanges and that it should be raised.