Binance, the world’s largest cryptocurrency exchange, is facing tax evasion claims in India, with authorities demanding $86 million in unpaid taxes before Binance can resume operations in the country.
This is the first time the Indian government is directly taxing a crypto entity in the country.
In January 2024, Binance and other crypto projects were banned from India for non-compliance with the country’s regulations. However, Binance disclosed in April that it had intentions to recommence its business in this nation.
Officially on August 6th, The Directorate General of Goods and Services Tax Intelligence (DGGI), which is an Indian law enforcement agency, sought from Binance $86m over allegations of tax evasion (GST).
A source aware of the issue stated that DGGI argues that Binance made huge profits through levying its customers for transactions on their platform.
“Binance reportedly earned at least Rs 4,000 crore from transaction fees charged to Indian customers. Detailed investigation revealed that the earnings of these fees were credited to the account of a Binance Group Company — Nest Services Limited — based in Seychelles” The source stated.
Binance’s offices in Seychelles, The Cayman Islands and Switzerland were emailed by Indian authorities as they followed up on the demand but it is reported that the cryptocurrency exchange did not respond to those messages.
India’s Law on Crypto Service Providers
Local cryptocurrency exchanges in India have already abided by this through taxation laws imposed for crypto entities. According to Indian law, all investors and service providers of cryptocurrencies must pay 1% TDS (tax deducted at source) on every transaction made with any digital asset irrespective of its value and 30% tax on all gains from crypto investments.
WazirX and CoinDCX are local Indian exchanges that have addressed the problem of taxation using their internal mechanisms. However, international/fraudulent Binance has not done the same yet.
Before, Indian authorities demanded a fine of $86 million for unpaid taxes during Binance’s tenure in the country even though earlier Binance tried to pay $2 million in fines just to resume operations locally.
Amongst them is Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global , Bittrex and Bitfinex are other foreign cryptocurrency exchanges expected to receive similar tax burdens like what happened with Indians.
Binance also facing Tax evasion issues in Nigeria
Binance is also embroiled in tax evasion issues in Nigeria, where one of its staff members, Tigran Gambaryan, is currently in prison. Nigerian authorities have accused Binance of tax evasion and money laundering in a case that has been ongoing in court.
