Binance tops list of 17 crypto entities probed for tax evasion in India

According to the Indian Ministry of Finance, Binance is responsible for the highest Goods and Services Tax evasion among registered cryptocurrency exchanges in India.

Responding to a parliamentary question on tax compliance of cryptocurrency exchanges, Finance Minister Pankaj Chaudhary clarified that the total GST evasion by these entities amounts to ₹ 824.14 crore ($96 million), with the majority share coming from the Binance group company.

According to the ministry, 47 Virtual Digital Asset Service Providers were registered as reporting entities under the Financial Intelligence Unit, of which 17 entities were investigated for GST evasion.

Nest Services Limited, a Seychelles-based Binance Group company, evaded GST to the tune of Rs 722.43 crore (about $85 million), making it the largest contributor to the total evasion detected by the Indian Ministry of Finance.

The next biggest GST evader is Zanmai Labs Pvt. It was WazirX, operated by. Ltd. was found to have evaded ₹40.51 crore. The platform was hacked in July and lost $235 million worth of funds.

The government has managed to recover a total amount of ₹122.29 crore from all entities, including interest and penalties. In contrast, there have been no recoveries so far from the Binance-affiliated organization, despite the fact that smuggling is much higher.

GST is a nationwide indirect tax imposed on the production, sale and consumption of goods and services. Foreign entities providing services in India are required to register under the GST framework and comply with their tax obligations.

As previously reported by crypto.news, the Ahmedabad Directorate General of GST Intelligence sent a show-cause letter to Nest Services in August after finding that fees collected from Binance’s operations were deposited into accounts controlled by the company.

DGGI claimed that Binance earned at least Rs 4,000 crore (about $476 million) in transaction fees before it was asked to discontinue services and complete registration.

Binance complied with this rule in August and became a registered reporting entity under the Financial Intelligence Unit, after paying a $2.25 million fine for operating without a license.

To resolve the tax evasion issue, Binance has reportedly appointed a representative to liaise with the agency. Meanwhile, the exchange is actively assisting Indian law enforcement in the fight against illegal activities.