In a significant move to regulate the burgeoning cryptocurrency market, the Indian government has issued a substantial tax bill to Binance, the biggest cryptocurrency exchange in the world.
The Ahmedabad unit of the Directorate General of GST Intelligence (DGGI) has sent this show cause notice to Binance. It demanded $86,033,159 in Goods and Services Tax (GST), as per India’s tax policies.
This tax comes for transactions made by Indian customers on the platform. This marks the first time the DGGI has taken a hit on a cryptocurrency firm with such a big notice, setting a major example in India’s regulatory landscape.
Binance Challenges the $89M Tax Demand
According to the reports, the notice was issued because Binance collecting fees from Indian customers trading in virtual digital assets (VDAs). Now, this is classified under online information database access or retrieval (OIDAR) services.
According to Indian law, these services are liable to GST, and the DGGI’s move highlights the government’s resolve to enforce tax compliance in the quickly growing digital asset market.
Nonetheless, Binance has contested the almost $86 million tax notification. CoinDesk was informed by a person with intimate knowledge of the situation that the corporation disputed the DGGI’s assertions.
Under the Ministry of Finance, the Directorate General of GST Intelligence is in charge of obtaining and sharing information about indirect tax evasion.
Ongoing Regulatory Tensions for Binance in India
This tax warning comes after Binance encountered several regulatory difficulties in India. The Financial Intelligence Unit (FIU) of India granted the company permission earlier this year to register as a virtual asset service provider (VASP). However, the FIU recently fined Binance heavily for breaking anti-money laundering (AML) laws.
The DGGI’s decision to publish this show cause notice demonstrates India’s increasing emphasis on strengthening the laws governing cryptocurrencies, especially those on financial regulations and tax compliance. This lawsuit may have major ramifications for other international cryptocurrency platforms that operate in the nation as the government continues to refine its policies around digital assets.