Massive GST evasion unearthed as DGGI goes mining into cryptocurrency service providers
The searches come days after the GST Mumbai East Commissionerate detected alleged GST evasion of Rs 40.5 crore while investigating business activities of cryptocurrency exchange WazirX.
Directorate General of GST Intelligence officials conducted nationwide searches at the offices of major cryptocurrency service providers and reportedly unearthed massive tax evasion. The searches are reportedly part of a special anti-tax evasion drive based on intensive data mining and data analytics. The searches come days after the GST Commissionerate in Mumbai detected alleged GST evasion worth Rs 40.5 crore while investigating business activities of cryptocurrency exchange WazirX.
The agency claimed to have recovered Rs 49.2 crore in cash from WazirX pertaining to GST evaded, interest and penalty. The WazirX Exchange gives traders options to carry out transactions in either Rupee or WRX, which has to be bought from the WazirX platform. In a statement, the Directorate General of GST Intelligence said that even though the taxpayer is charging a commission on each transaction in cryptocurrency from both the buyer as well as the seller, the rate of commission is different for both transactions. The agency highlighted that the transaction in rupee attracts a commission of 0.2% while the transactions in WRX attract a commission of 0.1%.
The agency alleged that the taxpayer was only paying GST on commission earned in rupees but not on the earnings in WRX. According to the rules, a GST at the rate of 18 per cent is applicable on the transaction fees. A GST of Rs 40.5 crore was unpaid, which was recovered along with interest and penalty on December 30, 2021.
The agency officials are probing the business transactions related to emerging economic space like Non-Fungible Tokens, e-commerce and online gaming to identify the areas of possible tax evasion.