Binance, a major global cryptocurrency exchange, faces regulatory challenges yet again. Following a $2 million fine to the Financial Intelligence Unit (FIU), the exchange is now confronted with an $86 million demand from India’s Directorate General of GST Intelligence (DGGI) due to tax compliance issues.
Binance Receives $86 Million GST Tax Notice
The DGGI branch in Ahmedabad sent a notice to Binance requiring a payment of Rs 722 crore, equivalent to around $86 million, for evading Goods and Services Tax (GST) from June 2017 to March 2024.
Allegedly, the tax authorities claim that Binance collected fees from Indian customers trading virtual digital assets on the platform without being registered under India’s GST framework.
The investigation unveiled that Binance garnered transaction fees of over Rs 4,000 crore ($476.7 million) in India, directed to the exchange’s accounts in Seychelles.
Despite attempts by the DGGI to contact Binance entities in different countries, no response was received. However, the exchange has engaged a local counsel to address the tax compliance issue.
India’s Ongoing Regulatory Actions
According to India’s GST regulations, foreign service providers must pay GST for services offered to local customers, especially those falling under online information database access or retrieval services.
The DGGI is reportedly extending its investigations to other overseas and domestic crypto exchanges, marketplaces, and gaming platforms for potential tax evasion activities.
Binance’s notice is part of India’s broader efforts to enhance oversight in the expanding crypto sector, aiming to combat financial crimes and safeguard investors’ interests.
