Cryptocurrency is the hottest word in the tech universe and among the investor class nowadays. In India, the cryptocurrency craze is even higher. A recent report revealed that India has the world’s highest owners (around 10 crores) of the new form of currency.
However, GST intelligence is running after the crypto service providers as massive tax evasion has been found in crypto exchanges.
Cryptocurrency exchange and its tax evasion
Directorate General of GST Intelligence (DGGI) conducted investigations on cryptocurrency service providers across the country. DGGI authorities found massive tax evasion while investigating these crypto exchanges.
As per the sources, “Around half dozen offices of Cryptocurrency Service providers have been searched and massive Goods and Service Tax (GST) evasion has been detected by DGGI.”
The agency, in a statement, reported that WazirX, a cryptocurrency service providing company was fined Rs 49.20 crore for evading legal taxes.
As per the sources, approximately Rs 70 crore worth of tax evasion has been discovered while investigating the crackdown on Cryptocurrency trade by Mumbai CGST and DGGI.
It is pertinent to note that the crackdown on cryptocurrency exchanges came months after India decided to introduce a law to regulate it as an investment in this form of currency is frequently increasing.
An official source reported, “These service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax. These transactions were intercepted by DGGI and they were confronted with evidence that proved non-payment of GST.”
Another top source said, “They paid Rs 30 crore and Rs 40 crore as GST, interest and penalty for non-compliance to the statutory provisions of GST law. For violating GST laws the CBIC has recovered Rs 70 crore from Cryptocurrency Service providers including WazirX.”
What is cryptocurrency?
Cryptocurrency is a digital form of currency that works on blockchain technology. Some of the popular cryptocurrencies are Bitcoin and Ethereum.
Most of the cryptocurrencies are untraceable. Thus, cryptocurrencies cannot be left unregulated because they can be used for terrorism, human trafficking, drug trafficking, and many other kinds of illegal transactions.
Read more: The dark side of Cryptocurrency that nobody is even thinking about
In February this year, the Modi government introduced ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ during the budget session of the parliament in order “to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India.”
Read more: PM Modi’s decision on cryptocurrency is timely and absolutely correct
Additionally, the bill also sought to “prohibit all private cryptocurrencies in India”, while, allowing certain exceptions “to promote the underlying technology of cryptocurrency and its uses.”
Crypto wallets and exchanges are platforms through which merchants and consumers can transact digital currencies like Bitcoin, Ethereum, Ripple, etc.
Due to the anonymity of Crypto, there are chances of digital funds getting misused. It is important for the Government of India, to regulate the inflow and outflow of such digital transactions.