India Crypto Claims $86 Million from Binance for Unsettled GST Taxes
India Crypto Claims– Indian law enforcement agencies have demanded 722 crore Indian rupees (approximately $86 million) in unpaid taxes from the crypto exchange Binance.
In January 2024, Binance, along with several other offshore crypto exchanges, was banned in India for not adhering to local regulations. However, in April, Binance announced its intention to resume crypto trading in the region after settling its outstanding tax obligations.
On August 6, the Directorate General of Goods and Services Tax Intelligence (DGGI) — a key Indian law enforcement agency — issued a demand for $86 million from Binance under the Goods and Services Tax (GST), according to The Times of India. A local source cited in the report noted:
Binance reportedly earned at least Rs 4,000 crore from transaction fees charged to Indian customers. Investigations revealed that these earnings were credited to a Binance Group Company — Nest Services Limited — based in Seychelles. This demand from the DGGI is the first time the Indian government has issued a tax demand to a crypto exchange.
Moreover, Indian authorities had previously sent email notices to Binance offices in Seychelles, the Cayman Islands, and Switzerland, which were ignored by the exchange. Binance has since appointed local counsel to address its tax obligations.
Crypto Tax Obligations in India for Offshore Exchanges
Indian law mandates that all crypto service providers and investors pay a 1% tax deducted at source (TDS) on every crypto transaction, regardless of its amount. Additionally, profits from crypto investments are taxed at 30%.
While domestic exchanges like WazirX and CoinDCX have set up systems to manage tax obligations for their users, offshore exchanges did not comply with these requirements at the time.
Initially, Binance planned to settle for a $2 million fine for noncompliance and resume its services in India. However, the fine was raised to $86 million to recover the fees Binance collected from Indian users during its operation in the country.
India’s Approach to Crypto Taxation
The Indian government is actively targeting offshore crypto exchanges that have operated without registering under India’s GST framework. The GST framework in India includes four tax slabs: 5%, 12%, 18%, and 28%, with additional cess for certain goods and services.
It is anticipated that Indian authorities will impose similar tax requirements on other foreign crypto exchanges, including Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex, and Bitfinex, among others.
Binance is also facing legal challenges related to tax evasion in other parts of the world, including Nigeria.
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