Tax Officials in India assert $97 million tax debt on Binance and other digital currency exchanges
In a series of developments, Binance, one of the world's largest cryptocurrency exchanges, is embroiled in a tax evasion investigation and has an outstanding Goods and Services Tax (GST) liability in India.
The Indian government, led by Finance Minister Pankaj Chaudhary, has disclosed that 17 cryptocurrency companies, including Binance, WazirX, and CoinDCX, owe the government a combined sum of $97 million in unpaid GST. Among this amount, Binance is attributed with the majority, approximately $85 million.
The troubles for Binance began in August 2024, when the company faced accusations of non-compliance with GST regulations related to trading fees. This was followed by a block on Binance's online resources by Indian authorities in December 2023 due to licensing issues, forcing the platform to temporarily suspend operations in the country.
Despite these challenges, Binance has expressed its commitment to full compliance with all tax obligations. The exchange, which secured an official license to operate in India in August 2024, has reportedly agreed to clear its tax dues following the licensing. However, as of the current news, the promised tax payment by Binance has not been made.
Investigations into tax evasion have also been launched against other exchanges, including WazirX, CoinDCX, and CoinSwitch Kuber. Specific details about these cases are currently under wraps.
One notable case involving Binance was the Fiewin case, where the exchange assisted in tracing $47.6 million in December 2023.
The Indian government tightened cryptocurrency regulations in August 2024, leading to platform closures and business strategy adjustments. As the investigations continue, Binance continues to engage with regulatory authorities to address concerns regarding its tax obligations.
The unpaid GST liability currently stands at $97 million, with $14 million already recovered by authorities. The remaining $12 million involves platforms such as CoinSwitch, UnoCoin, and Flitpay.
As the situation unfolds, Binance and other cryptocurrency exchanges in India are expected to navigate the complex regulatory landscape to ensure compliance and maintain their operations.
