Cryptocurrency exchange WazirX fined Rs 49.2 crore for tax evasion

The Mumbai East Commissionerate of GST has recovered Rs 49.20 crore from the country’s largest cryptocurrency exchange WazirX. According to an ANI report, the commissioner on Friday detected GST evasion of Rs 40.5 crore and recovered huge amount from WazirX by way of GST evasion, interest and penalty. It has been reported by the commissionerate that WazirX launched its own cryptocurrency, WRX, but did not pay GST on the transactions in it. 18 per cent GST was to be paid on WRX transactions. During investigation, the commissionerate came to know about tax evasion, after which a huge fine has been imposed on WazirX.

The commissionerate informed that cryptocurrency exchange WazirX gives traders the option to trade in Rupee or WRX. WRX has to be bought from the WazirX platform, in exchange for which WazirX is charging commission from both the buyer and seller on each cryptocurrency exchange. Separate commission is charged for transactions in Rupee or WRX. Transactions in Rupee attract a 0.2 percent commission and WRX transactions attract a 0.1 percent commission.

During investigation, it was found that WazirX- collected revenue in the form of trading fees, deposit fees and withdrawal fees. The commissionerate has said that WazirX was paying GST only on the commission earned on Rs. He was not paying GST on the commission he received in WRX. These transaction fees attract GST at the rate of 18 per cent. The commissionerate has said that about 40.5 crore GST was not paid. It was recovered with interest and penalty on 30th December. In this way, Rs 49.2 crore has been recovered from WazirX. The investigation in this matter is still on.

This action has been taken under the anti-tax evasion campaign. The officials of CGST Mumbai zone are probing transactions in emerging sectors like e-commerce, online gaming, non-fungible tokens to identify areas of potential tax evasion. The commissionerate has informed that the CGST department will cover all cryptocurrency exchanges falling in the Mumbai zone. This campaign will be intensified in the coming days. With this stand of the commissionerate, it seems that in the coming days, transactions in many more cryptocurrency exchange platforms may be investigated. It is believed that many more cases of tax evasion may come to the fore in the crypto exchange platform.