GST dept recovers ₹49.2 crore in tax, interest & penalty from WazirX

CBIC comes under the Department of Revenue of the government of India.

“Officers of CGST Mumbai East comm’te have detected GST Evasion of ₹40.5 Cr. on commission of Wazir X Crypto Currency & recovered ₹49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd,” GST Mumbai Zone tweeted on Thursday night.

WazirX was registered as Zanmai Labs in December 2017 as a domestic cryptocurrency startup.

In a response to the tax evasion, a Zanmai Labs’ spokesperson said that the company has been diligently 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,” the spokesperson added.

“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,” the person added.

This is not the first time that WazirX has come under the scanner of tax agencies.

Enforcement Directorate under the Ministry of Finance in June 2021 had disclosed that it had issued a show-cause notice to the crypto exchange for contravention of the Foreign Exchange Management Act (FEMA Act) for transactions involving cryptocurrencies worth ₹2,790.74 crore.

The agency had issued a statement saying that it stumbled upon the transactions of the company during an ongoing money laundering probe into the “Chinese-owned” illegal online betting applications.

“It was seen that the accused Chinese nationals had laundered proceeds of crime worth about ₹57 crore by converting Indian Rupee (INR) deposits into cryptocurrency tether (USDT) and then transferred it to Binance (exchange registered in Cayman Islands) Wallets based on instructions received from abroad,” the agency had said.