Sources in India’s Directorate General of Goods and Services Tax Intelligence (DGGI) have said that several crypto exchanges in the country have evaded taxes. This revelation came after India’s tax officials raided the offices of the most reputed crypto platform providers in the country. WazirX was the first platform to feel the pinch. The sources suggest that the combined amount of taxes evaded by the crypto exchanges is a whopping Rs. 70 crore, i.e., more than $9 million.
Right now, investigations are ongoing at exchanges like CoinDCX, Coinswitch Kuber, Unocoin, and BuyUCoin. The GST rate that these crypto exchanges are subject to is 18%.
This comes as a big blow to the crypto industry in India, hot on the heels of the withdrawal of the country’s crypto bill in Parliament. In 2021, the Indian government had announced a cryptocurrency bill aiming to ban private cryptocurrencies in the country. However, it was withdrawn after sources in the government suggested that the top officials want to take a decision only after wider consultations with the advocates and the skeptics.
While the cryptocurrency industry in India has been growing exponentially over recent years, many experts have called on the government to ban cryptocurrencies. The experts suggest that the widespread adoption of cryptocurrencies can result in economic volatility. Many of them have also spoken out about their fears of cryptocurrencies falling into the wrong hands that may use the technology to finance illicit activities.
Representatives of all the exchanges who have come under the DGGI’s recent scrutiny were earlier in talks with the government to encourage authorities to take a middle path in terms of crypto regulation. Only time will tell how these tax evasions affect cryptocurrencies in India.