GST Mumbai East Commissionerate, Mumbai Zone, on Friday detected GST evasion of Rs 40.5 crore and recovered Rs 49.20 crore in cash related to GST evasion, interest and penalty from cryptocurrency exchange WazirX.
According to a press release from the commissionerate, the detection was made during an investigation into the business activities of the exchange, which is managed by Zanmai Labs and cryptocurrency Owned by WRX Binance Investments, Seychelles.
As per the release, this exchange offers the trader the option to transact in Rupee or WRX. WRX to be purchased from vizierX Forum. The taxpayer is charging commission from both buyer and seller on each transaction in cryptocurrency, it said.
“However, the commission rate for both the transactions is different. Transactions in Rupee attract a commission of 0.2 per cent and WRX transactions attract a commission of 0.1 per cent,” the release said.
During investigation it was revealed that the taxpayer used to collect revenue from the commission in the form of trading fee, deposit fee and withdrawal fee. The taxpayer was paying GST only on the commission earned in Rupees but was not paying GST on the commission earned in WRX. These transaction fees attract GST at the rate of 18 per cent. GST of Rs 40.5 crore was not paid, which was paid along with interest and penalty on 30th December. Total Rs. 49.2 crores have been recovered from WazirX on the spot. Further investigation is on.
The above case is a part of particular anti-tax evasion campaign, which relies on intensive data mining and data analysis initiated by CGST Mumbai region. CGST Mumbai region authorities are probing business transactions related to emerging economic spaces such as e-commerce, online gaming, non-fungible tokens to identify areas of potential tax evasion.
“The CGST department will cover all the upcoming cryptocurrency exchanges in Mumbai region and intensify the operation in the coming days,” the release said.
The inspection of the matter is going on.
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