Half a Dozen of India’s Crypto Exchanges Searched After Alleged Rupee 700M Tax Evasion Detected: Sources

The sources said the searches were initiated after a lead from Goods and Service Tax Mumbai Zone, a Mumbai Tax authority, led to alleged tax evasion found by the Directorate General of GST Intelligence, a central authority.

India’s tax authorities have conducted searches at some of India’s biggest cryptocurrency exchanges including “Coinswitch Kuber, CoinDCX, BuyUCoin, and Unocoin after what they deemed tax evasion of Rs. 40.5 Crores (400 million INR or $6 million USD approx.) was detected at cryptocurrency exchange WazirX, according to sources with direct knowledge of the searches.

On Dec. 30, a team of officers from CGST(Goods & Services Tax and Central Excise) Mumbai East Zone, tax authorities in India’s financial capital, Mumbai, tweeted saying they “had detected GST Evasion of Rs 40.5 Cr. ... & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty.” On Dec. 31, the tax authority revealed details in a statement saying “the case is a part of the special anti-tax evasion drive, which relies on intensive data mining and data analytics, initiated by the CGST Mumbai Zone.”
They also warned that they “will cover all the cryptocurrency exchanges falling in Mumbai zone and will also intensify this drive in the coming days.”
WazirX blamed a lack of clarity in regulation for the matter, saying it’s “been diligently paying tens of crores worth of GST every month. There was an ambiguity in the interpretation of one of the components which led to a different calculation of GST paid. However, we voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax. That being said, we strongly believe that regulatory clarity is the need of the hour for the Indian crypto industry.”
Following the WazirX search, Mumbai’s Tax authority, along with DGGI, the national law enforcement agency under the Ministry of Finance responsible for fighting tax evasion in India, searched around half a dozen offices of cryptocurrency service providers on Saturday.
Tax authorities searched and recovered from cryptocurrency exchanges “Coinswitch Kuber by M/s Bitcipher Labs LLP, CoinDCX by M/s Neblio Technologies PVT. LTD., BuyUCoin by M/S I Block Technologies Pvt. LTD. and Unocoin by M/s Unocoin Technologies Pvt. LTD.” The DGGI recovered Rs 30 crore (4 million USD approx.) worth of funds that resulted from tax evasion during the crackdown on cryptocurrency trade massive tax evasion.
More than 50 officers conducted the searches in which the exchanges cooperated, the sources said.