There could be confusion regarding the fee charged by WazirX and the GST levied on it.
Binance owned cryptocurrency exchange, WazirX is being investigated by the Goods and Services Tax (GST) Department.
Charges of GST Evasion
The office of the Mumbai Zone announced that late Thursday evening. It is alleged that Zanmai Labs, the parent company of the exchange, has evaded INR 40.5 crores on the commission of Wazir X cryptocurrency.
Officers recovered INR 49.2 crores in cash as GST, interest, and penalty.
Mint quoted the response of a WazirX representative on the issue who explained that the company has been paying tens of crores worth of GST every month.
“There was an ambiguity in the interpretation of one of the components, which led to a different calculation of GST paid. However, we voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax. That being said, we strongly believe that regulatory clarity is the need of the hour for the Indian crypto industry. It will also provide us with more clarity on taxation so that we can work in sync with the lawmakers, and continue to be a responsible industry player.”WazirX Spokesperson
Maybe it could be because of the confusion arising out of differences in the commission fee charged by WazirX. It charges 0.2% both maker and taker fees on both buy and sell orders.
If a user buys crypto through WRX token, no fee is charged. Moreover, if a user pays trading fee through WRX, they can avail a discount on the fees charged. No fee paid in INR means GST could not be levied. This news may have sounded an alarm for WRX as it posted a red candle. At the moment, WRX is trading for INR 97 on WazirX.
Previous Issues With Regulators
This isn’t the first time WazirX has courted controversy with regulators.
Earlier this year, the Enforcement Directorate (ED) had summoned the exchange about the transactions worth INR 2,790.74 crores. ED said the INR 800 crores crypto inflow and INR 1,400 crores crypto outflow were not available on the blockchain. ED regards it as a violation of FEMA.
To avoid such issues in future, WazirX has partnered with TRM Labs for better compliance and to prevent crypto fraud.
Regulatory uncertainty is causing issues for not just the crypto stakeholders but also the regulators. Cryptoverse has opened the door for a whole new stream of tax revenue for regulators. They may be for or against crypto, but certainly, they are also facing issues on tax collection.
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