- Allegations and Non-Compliance
- Efforts to Comply and Ongoing Issues
- OIDAR Classification and Financial Implications
The Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI) has issued Binance a show-cause notice demanding a GST payment of Rs 722 crore ($86 million). This is the first such action against a cryptocurrency firm in India.
Allegations and Non-Compliance
The tax recovery notice alleges that Binance collected fees from Indian customers trading in virtual digital assets (VDAs) on their platform without registering under the Indian GST framework.
Efforts to Comply and Ongoing Issues
In June 2024, Binance faced a fine of approximately $2.2 million for providing services to Indian clients without adhering to the nation's anti-money laundering rules. However, the company received approval from India's Financial Intelligence Unit (FIU) and committed to complying with the Prevention of Money Laundering Act (PMLA) and the VDA taxation framework.
OIDAR Classification and Financial Implications
The DGGI's notice categorizes Binance's services as Online Information and Database Access or Retrieval Services (OIDAR). Reports indicate that Binance earned over $476 million in transaction fees, transferred to Nest Services Limited based in Seychelles.
This case sets an important precedent in India's efforts to regulate the rapidly growing virtual currency market.
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