The new DEFI platform enters the market! Earn passively - token sale 0.25 $ I'm going in!

WazirX fined $6.62 million by an Indian taxman for eluding commission tax

4 min reading

After discovering a $5.43 million GST evade on trade commissions, government authorities from the CGST Mumbai Zone retrieved the funds from crypto exchange WazirX.

WazirX, an Indian crypto exchange, allegedly paid more than $6.6 million (49.2 crore rupees) for fines for failing to pay Goods and Services Tax (GST) on trade charges. The overall amount covers the overdue tax of $5.43 million (40.5 crore rupees), interest, and a non-payment fine.
After detecting a GST evade of $5.43 million on the commissions, government officials from the Central GST and Central Excise committee (CGST Mumbai Zone) retrieved the funds from the crypto exchange. An ordinary GST fraud includes the creation of fraudulent bills without the products being transferred between the vendor and the buyer.
The tax authorities discovered that WazirX utilises its in-house WRX tokens for commissions, that were allocated by Zanmai Labs, as per local media Economic Times. The following research indicated that the crypto exchange failed to pay an 18% tax on the total tokens distributed depending on their market price.

The investigators discovered that WazirX paid GST on the 0.2 % commission it charges users for trading in local currency, i.e. the rupee, clarifying:
“But 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.”
Binance, the world's leading crypto exchange by trade volume, owns WazirX and WRX tokens.
According to a representative of Zanmai Labs, the default of tax was due to a misunderstanding of GST rules:
“We voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax.”

WazirX CEO Nischal Shetty recently said that regulatory transparency is necessary for retail adoption. He also cautioned that enacting regulations overnight could damage the crypto ecosystem's growth and create gaps for undesirable actors:
“There is a $2.5-trillion market out there, and it is not going to wait for any nation to come on board. I’ve been tweeting ‘#IndiaWantsCrypto’ for over 1,000 days with the sole objective of having crypto regulation in India.”

Whereas the idea of GST is relatively new in the region, the Indian government has earlier decided to be lenient toward defaulters and fraudsters, often resolving such cases with a financial penalty and a low chance of prison time. The spokesman for Zanmai Labs concluded:
"We strongly believe that regulations will 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 Confederation of Indian Industries (CII) suggested considering cryptocurrencies as a distinct group of securities to assist the Indian government in determining crypto laws.
According to a report created by the non-governmental trade association, the CII suggests developing new regulations for the emerging crypto industry rather than regulating it within existing securities law.
As per the reports, the CII proposed a special section of income tax and GST regulations that will recognise cryptocurrencies as an asset class for tax reasons until a user particularly treats it as "stock in trade."

Currency Exchange rate Buy cryptocurrency

Buy crypto now

Dear customer,

We use cookies to provide our services correctly and safely. Cookies are small text-based data sets that shall be saved on the device you are using in connection with the use of this instnat website. Cookies are created in order to ensure proper functioning of thes instant website. By clicking the button "I accept and go to the website", you implicitly agree to creation of the cookies on your computer and to deploy automatic tracking and data collection and processing on behalf of the Lushup Holdings FZ LEE. Click the above-captioned button is also tantamount to accepting website's privacy policy. Closing the notification by means of "X" is unequivocally connected with your consent. If you do not agree to any of the above, please discontinue using our Website.

“Cookies” shall make an identification of the software used by you and to customization of this instant website to your needs. Cookies contain the name of the domain from which they origin, duration of period of their storage on your computer and an assigned value.

Third party cookies:
We also use third-party cookies for the following purposes:

  • creating statistics - helping to understand the way Users use the Website, which allows to improve its structure and content with use of the analytical tools
  • defining a user profile - in order to display custom-tailored content in advertising networks.

External entities that might be source of any third-party cookies on this instant Website are as follows:

Using a settings of your web browser or by using pre-set configuration tools available in our service you can independently and at any time change the settings concerning your use of the “cookies”, specifying the conditionsof their storage and how your device is creating and downloading them. These settings can be changed to block the automatic handling of cookies in the settings of your web browser or inform about their placement on your device each time.

Detailed information about the options related to use of “cookies” is available in the settings of your software (web browser).

Service privacy policy

This instant document lays out the principles of the Privacy Policy on the website (hereinafter referred to as the "Website" or "Service"). The administrator of the Website is Lushup Holdings FZ LEE, Fujairah - Creative Tower, P.O.Box 4422 Fujairah, United Arabs Emirates.

The full document to read the Tokeneo privacy policy is available in this document.

Advanced settings can be changed in your browser.