Cryptocurrency exchange Binance is facing a major tax issue in India after the country’s tax authorities issued a notice demanding a Goods and Services Tax (GST) payment of $86 million.
The Directorate General of GST Intelligence claims that Binance collected fees from Indian customers for trading virtual digital assets without remitting the appropriate taxes, according to a local news.
Binance’s $86 Million Tax Demand in India
The tax demand on Binance arises from its classification as an online information database access or retrieval (OIDAR) service provider, which is subject to GST in India.
Binance’s earnings from transaction fees charged to Indian customers were substantial, reportedly amounting to at least $476 million, according to a report by the Times of India. These fees were credited to Nest Services Limited, a Binance Group Company based in Seychelles.
In response, Binance stated, “We are aware of certain media reports circulating regarding tax notices being issued by Indian GST authorities to global crypto platforms. Binance would like to clarify that it is, and has always been, committed to adhering to relevant domestic legislations applicable to us.”
Binance also added that it is “cooperating” with Indian authorities to address any concerns. This tax bill comes amid a turbulent period for Binance in India.
Binance’s Regulatory Challenges in India and Beyond
Earlier this year, Binance faced a ban by the Indian government in January 2024 due to non-compliance issues. However, it later received approval from India’s Financial Intelligence Unit to operate as a virtual asset service provider (VASP) and resumed operations.
The tax dispute in India is not an isolated incident for Binance. The company is currently facing similar challenges in other jurisdictions, including Nigeria, where it is embroiled in legal battles related to tax evasion.
In Nigeria, the tax evasion case has been contentious, with one of the company’s executives still being detained in prison.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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