WEB3
by BSCN
August 6, 2024
The tax notice stems from allegations that Binance collected fees from Indian customers trading in virtual digital assets (VDAs) without registering under the Indian GST framework.
The Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI) has issued a show-cause notice to Binance, the world’s largest cryptocurrency exchange, demanding a Goods and Services Tax (GST) payment of Rs 722 crore, equivalent to $86 million.
This marks the first time the DGGI has taken such action against a cryptocurrency firm, setting a significant precedent in India's efforts to regulate the rapidly growing virtual currency market.
However, Binance has challenged the showcause notice, according to a recent CoinDesk report.
The tax recovery notice alleges that Binance collected fees from Indian customers trading in virtual digital assets (VDAs) on their platform without registering under the Indian GST framework. This move follows a broader regulatory push in India to ensure that all financial activities, including those involving digital currencies, comply with national tax laws.
In June 2024, Binance faced a fine of approximately $2.2 million for providing services to Indian clients without adhering to the nation's anti-money laundering rules.
However, this process also saw Binance receiving approval from India's Financial Intelligence Unit (FIU) as a registered entity. In its bid to resume operations, Binance committed to full compliance with the Prevention of Money Laundering Act (PMLA) and the VDA taxation framework.
Despite these commitments, Binance has previously been criticized for a casual approach to Indian regulations, leading to significant tax leakage and its initial ban.
Reports indicate that Binance's non-compliance with the 1% tax deducted at source (TDS) on registered exchanges gave it an undue advantage over competitors. The current investigation by the DGGI, independent from the FIU, focuses on the platform's failure to adhere to GST registration requirements.
The DGGI's notice categorizes the services provided by Binance as Online Information and Database Access or Retrieval Services (OIDAR). OIDAR services are delivered via the internet and received by the recipient online, without any physical interface with the supplier.
According to reports, Binance earned more than $476 million (approximately Rs 4,000 crore) in transaction fees, transferred to a Binance Group Company, Nest Services Limited, based in Seychelles.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
Latest News
November 8, 2024
Ethereum Foundation (EF) Releases 2024 Annual Report: A Look at its Financial Growth
November 8, 2024
Dan Gallagher in the Lead as Trump’s Pick for SEC Chair: Report
November 7, 2024
Political Betting Contracts, Cross-Chain Communication Advances, and Crypto Payments in Detroit
November 7, 2024
What Donald Trump's Victory Means for Crypto Policy, His Legal Battles, and Ross Ulbricht's Future
November 7, 2024
Bitcoin Hits Record High as BlackRock's IBIT Sets New Trading Volume Milestone
November 7, 2024
U.S. House Gets Pro-Crypto Majority, 261 Representatives Elected with Industry Support
November 6, 2024
Bitcoin’s Soaring Price, Pro-Crypto Election Wins, and a Promising Future: Key Highlights from Today’s Events
November 6, 2024
OpenSea Unveils Major Upgrade to NFT Marketplace, Set to Launch in December