Govt detects GST Evasion worth Rs.824.14 Crore by Crypto Exchanges like Nest Services and CoinDCX

The Minister of State for Finance Pankaj Chaudhary said, the Indian government has uncovered massive GST evasion by 17 cryptocurrency exchanges totalling Rs.824.14 crore. This discovery is part of a larger effort to target tax evasion in the cryptocurrency business.

Nest Services Ltd, part of the Binance Group, is one of the exchanges under investigation for potential GST evasion of Rs.722.43 crore. Other platforms under investigation include Zanmai Labs Pvt Ltd, which operates WazirX, with Rs.40.51 crore, CoinDCX with Rs.16.84 crore, and CoinSwitch Kuber with Rs.14.13 crore in suspected evasion.

Authorities have so far recovered Rs.122.29 crore in taxes includes penalties and interest. The Central GST authorities are continuing to investigate these cases as part of a bigger assault on tax evasion in the cryptocurrency sector.

In India, cryptocurrencies are categorised as Virtual Digital Assets (VDAs) under Section 2(47A) of the Income Tax Act. Profits from cryptocurrency transactions are taxed at a fixed 30% rate, with no deductions allowed except for acquisition costs. Additionally, a 1% Tax Deducted at Source (TDS) is imposed to transactions exceeding Rs.50,000 per year to improve transaction traceability.

Individual investors that deal in VDAs are likewise subject to increased scrutiny from the government. GST authorities discovered Rs.1.76 crore of evasion by four investors and recovered Rs.2.40 crore, including penalties and interest.

The approach of India to cryptocurrency rules is developing, with officials attempting to strike a balance between innovation and financial control. The existing taxation framework shows the government’s intention to regulate the cryptocurrency sector while upholding budgetary duties. Investors and service providers should be informed about regulatory developments to ensure compliance with legal requirements.