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Taxman Recovers Rs49 Crore from Wazir X in Unpaid Dues

The goods and services tax (GST) department has recovered Rs49 crore from cryptocurrency exchange WazirX in unpaid taxes are related dues for alleged non-compliance on taxable coin sales.

The amount recovered included unpaid GST exceeding Rs40 crore, interest on that amount and penalties. The indirect tax department claims that WazirX issued its own cryptocurrency, WRX coins, through Zamia Labs, but refused to pay GST on that amount.

The tax department contended that GST of 18% is applicable on these coins that were sold on the exchange. The tax department said Zamia Labs was managing WazirX cryptocurrency exchange applicable in India.

According to the tax department Binance Investments, a Seychelles-based entity, own both WazirX and WRX, the coins.

Tax investigations showed that WazirX allowed trading and investment in other crypto assets such as bitcoin, mainly in two ways: customers could either buy these crypto assets through INR or through WRX coins.

“The WRX coins are required to be purchased from the WazirX platform by the trader’s Indian rupees. The taxpayers are charging a commission on each transaction in cryptocurrency from the buyer and seller both.

The platform provides options for the trader to transact in INR or WRX coins,” the tax departments said.

In case where the trader opts for transactions in the Indian rupee, a commission is charged on the trading volume. The commission, the tax investigation found, was to the tune of 0.2% of the volume.

WazirX is playing GST on the commission. “But in cases where the traders opt for transaction in WRX coins, the commission charged is 0.1% of trading volume and they were not paying GST on such commission,” the tax department said.

A Zamia Labs spokesperson said that it has been paying GST every month and there seems interpretation of the tax framework. S-ET

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