Last updated on August 13th, 2024 at 02:43 pm
The world’s biggest crypto exchange, Binance, has disputed the $86 million tax SCN received from India’s anti-tax evasion investigation body, DGGI. The notice, initiated by the DGGI’s Ahmedabad chapter, alleges that Binance failed to pay taxes on the fees earned from Indian customers between July 2017 and March 2024.
The DGGI gathers, compiles, and shares information on indirect tax non-compliance under the Ministry of Finance. The Binance exchange has affirmed that, regarding the Indian authorities’ intentions, Binance is ready to work with the Indian governmental supervisory agencies to solve such matters. The spokesperson emphasized Binance’s commitment to adhering to relevant domestic legislation.
Also Read: India FIU Fines Binance $2.25 Million for AML Non-Compliance
Investigation and Previous Fines
By June 2024, Binance was penalized $2.2 million for conducting business with Indian clients without adhering to the nation’s anti-money laundering laws. Even though Binance got the license for registration with the Indian FIU this year in the early half, the investigation coming out of the DGGI differs from that of the FIU.
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This case concerns services that fall under the Online Information and Database Access or Retrieval Services (OIDAR) category. These services are offered over the Internet, with no direct physical contact between the supplier and the recipient of the services, and have been introduced to level the foreign and Indian service providers. The rationale for this kind of categorization is to ensure that overseas service providers are not in a position to swamp the local ones.
Breaking: #Binance Faces Scrutiny From Indian Authority, Receives $86M Tax Showcause Notice#cryptonewstoday #tuesdayvibes #BTCNews pic.twitter.com/QurvlRKMZu
— 36crypto – Crypto News (@36Crypto2) August 6, 2024
Financial Implications and Future Proceedings
The Economic Times, citing a top source, reported that Binance earned over $476 million in transaction fees, transferred to a Binance Group Company, Nest Services Limited, based in Seychelles. This shows cause notice is essential as the DGGI has named an international crypto exchange for the first time while it has previously gone after Indian crypto exchanges.
Binance’s challenge to the showcause notice will be closely observed as the issue develops. The conclusion will impact the regulatory environment and the operations of foreign cryptocurrency exchanges in India.
Binance’s contestation of the DGGI’s $86 million tax showcause letter underlines the continued monitoring of cryptocurrency exchanges. The outcome of this lawsuit will be critical for the future of cryptocurrency legislation in India, particularly for multinational exchanges.
Also Read: SEC Revises Binance Lawsuit, Drops Solana from Alleged Securities List
Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.