Binance is pushing back hard against a tax penalty of nearly $86 million slapped on it by India’s Directorate General of Goods and Services Tax Intelligence (DGGI).
The issue comes from fees the crypto giant supposedly collected from Indian traders from July 2017 through March 2024.
A spokesperson from Binance confirmed their cooperation with the Indian authorities, saying,
“We are currently reviewing the details of the notice and are fully cooperating with the Indian tax authorities.”
They emphasized Binance’s commitment to strictly following all local laws affecting their operations.
Regulatory heat on crypto exchanges
The DGGI, operating under the Indian Ministry of Finance, alleges that Binance bypassed certain tax liabilities during the specified period.
This agency, tasked with clamping down on indirect tax evasion, has previously targeted Indian exchanges but this is the first instance of such a notice being issued to an international platform like Binance.
The notice from DGGI was dispatched by its Ahmedabad chapter as an initial formal measure when suspecting tax rule violations. The Binance spokesperson reiterated that:
“Binance is, and has always been, committed to adhering to relevant domestic legislations applicable to us.”
Does India just hate crypto?
In a sweeping move at the end of 2023, India began restricting local access to international exchanges including Binance, with major tech giants like Apple and Google removing Binance and other related apps from their platforms in India following government’s orders.
Simultaneously, the country has been refining its cryptocurrency taxation framework.
The Union Budget 2022 saw the introduction of a 30% tax on gains from cryptocurrencies and other virtual digital assets, along with a 1% Tax Deducted at Source (TDS) on transactions exceeding a certain threshold.
These tax rates have sparked considerable debate within the crypto community about their effect on innovation and adoption. In June, India’s Financial Intelligence Unit imposed a fine of approximately $2.25 million on Binance.
Legislative developments specific to cryptocurrencies and Web3 technologies in India are definitely on a slow track, with potential delays extending into mid-2025.
Jayant Sinha, who leads the Finance Committee, mentioned that India needs strong, practical examples of how these new techs can actually benefit the country, especially considering how fast global standards are changing and the recent chaos in the markets with FTX and Terra debacles.
