Binance hit with $86M Tax Showcause notice in India for GST Violations

Binance has been hit with an $86 million tax bill by Indian authorities as regards GST violations.

A person directly involved in the matter said that Binance, the largest cryptocurrency exchange in the world, is contesting a nearly $86 million tax showcause notice from India's Directorate General of Goods and Services Tax Intelligence (DGGI). The notice was sent out last week by the DGGI chapter in Ahmedabad, a western city. It is the first official action the authority takes when it suspects a tax law violation.

According to the source, it stated how Binance allegedly received fees from Indian users who traded on its platform between July 2017 and March 2024. It's important to note that showcause notices do not always carry financial penalties. The multinational tech company Infosys contested the demand earlier this month, leading the DGGI to drop some of its accusations against the Bengaluru, India-based company.

The Economic Times stated in a report, citing a top source with knowledge of the development, that the transaction fees collected from Indian customers allowed Binance to earn at least Rs 4,000 crore. The platform is used by 90 million people globally, with a significant percentage of users originating from India. After a thorough examination, it was discovered that the profit from these fees was credited to Nest Services Limited, a Binance Group company, with its account located in the Seychelles, the post added.

In June 2024, Binance was fined about $2.25 million for providing services to Indian clients without adhering to the nation's anti-money laundering laws. During the process, the Financial Intelligence Unit (FIU) approved the exchange as a registered entity. However, the DGGI's inquiry is being conducted independently of the FIU, the post added.

The Indian government has introduced a new bill that essentially asserts its regulatory authority over foreign cryptocurrency platforms that serve Indian consumers.

Whaleinsider news earlier reported that after a crackdown on cryptocurrencies in Nigeria, the popular exchange Binance is allegedly facing trial in the west African nation for tax evasion with one of the company executives in detention.

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