Govt uncovers ₹824.14 crore GST evasion by crypto exchanges like Nest Services, CoinDCX

The Indian government has identified significant Goods and Services Tax (GST) evasion amounting to ₹824.14 crore by 17 cryptocurrency exchanges, according to Minister of State for Finance Pankaj Chaudhary. This discovery is part of a broader effort to address tax evasion within the crypto industry.

Among the exchanges investigated, Nest Services Ltd, associated with the Binance Group, is noted for an alleged GST evasion of ₹722.43 crore. Other platforms under scrutiny include Zanmai Labs Pvt Ltd, operator of WazirX, with ₹40.51 crore, CoinDCX with ₹16.84 crore, and CoinSwitch Kuber with ₹14.13 crore in alleged evasion.

Authorities have so far recovered ₹122.29 crore, which includes taxes, penalties, and interest. The Central GST authorities continue to probe these cases as part of a larger crackdown on tax evasion in the crypto sector.

In India, cryptocurrencies are classified as Virtual Digital Assets (VDAs) under Section 2(47A) of the Income Tax Act. Profits from crypto transactions are taxed at a flat rate of 30%, with no deductions allowed except for the cost of acquisition. Additionally, a 1% Tax Deducted at Source (TDS) is applied to transactions exceeding ₹50,000 annually to enhance transaction traceability.

The government's intensified scrutiny also extends to individual investors dealing in VDAs. GST authorities have detected ₹1.76 crore in evasion by four investors, recovering ₹2.40 crore, including penalties and interest.

India's approach to cryptocurrency regulation is evolving, with authorities aiming to balance innovation with financial oversight. The current taxation framework reflects the government's intent to regulate the crypto market while ensuring compliance with fiscal obligations. Investors and service providers are advised to stay informed about regulatory changes to ensure adherence to legal requirements.