Binance's return to India has garnered attention, but it comes with a ₹772 crore tax demand from Indian authorities. Despite the regulatory challenges, Binance aims to comply.
On 6th of this month, Binance, the world’s largest crypto exchange, has been issued a notice in India by the Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI). The notice demands a Goods and Services Tax (GST) payment of Rs. 772 crore (roughly equivalent to $91.95 million).
Binance allegedly collected fees from Indian customers but did not register under the Indian GST framework. The fees reportedly reached at least Rs 4,000 crore and were transferred to a foreign-based company.
The notice serves as an opportunity for Binance to present its case and align its business operations with India’s legal framework. The Bengaluru Commissionerate will oversee the proceedings, given Binance’s absence of a physical headquarters in India.
As per Indian authorities, Binance users in India had been circumventing tax laws, resulting in lower earnings declarations.
In December 2023, the Indian Ministry of Finance's Financial Intelligence Unit (FIU) issued notices to several offshore crypto exchanges, including Binance, for operating illegally in India. The issue centered around Binance not being registered as a "reporting entity" and not submitting routine statements to the Indian Income Tax Department.
Binance paid a fine of approximately $2.25 million to the FIU for violating Anti-Money Laundering (AML) regulations. It also committed to rigorous AML controls and tax reporting processes.
Binance's return is expected to inject new vigor into the Indian crypto market, fostering competition, innovation, and improved services for crypto enthusiasts.
Binance has committed to robust Anti-Money Laundering (AML) controls and tax reporting processes. It paid a $2.25 million fine to the Indian Financial Intelligence Unit (FIU) for violating AML regulations. Despite an $86 million tax demand, Binance intends to comply with Indian tax laws. The demand is related to Goods and Services Tax (GST) liabilities due to users circumventing tax declaration.
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