WazirX, one of India’s leading crypto exchange platforms, has paid more than $6.6 million for failure to pay the Goods and Services Tax (GST) on trade commissions. The money paid by the exchange will cater for the pending tax, interest accrued and penalties.
Officials from the Central GST and the Central Excise Committee (CGST) have recovered the said funds from the exchange after detecting a tax evasion of $5.43 million.
WazirX fails to pay trade commissions
A publication from the Economic Times stated that tax authorities detected that the exchange was using its native WRX tokens for commissions. Further analysis showed WazirX did not pay an 18% tax on the total amount of tokens issued at the ongoing market price.
The investigators stated that WazirX made a payment to GST out of the 0.2% commission charged on users for trading with the rupee. However, the tax officials noted 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.”
A spokesperson from Zanmai Labs said the failure to pay taxes was because of a misinterpretation of the GST rules. “We voluntarily paid additional GST to be cooperative and compliant. There was and is no intention to evade tax,” the report noted.
Crypto regulatory clarity
The CEO of WazirX, Nischal Shetty, had previously commented on the benefits of regulatory clarity in retail crypto adoption. Shetty warned that the lack of clear regulations could harm the crypto sector in India and allow bad actors to venture into the sector.
“There is a $2.5 trillion market out there, and it is not going to wait for any nation to come onboard. I’ve been tweeting ‘#IndiaWantsCrypto’ for over 1000 days with the sole objective of having crypto regulation in India,” the CEO stated.
The GST is still new in the Indian financial market. The government had initially stated it would be lenient to defaulters. It would focus on settling cases through penalties and not jail time.
Late last year, India made headlines after launching a crypto bill seeking to ban private cryptocurrencies. The bill is yet to be voted upon, but the country could impose a blanket ban on cryptocurrencies if it passes.
Your capital is at risk.
Read more:
Credit: Source link
