Binance is vigorously contesting a nearly $86 million tax penalty imposed by India’s Directorate General of Goods and Services Tax Intelligence (DGGI). The penalty relates to fees Binance allegedly collected from Indian traders between July 2017 and March 2024.
A Binance spokesperson confirmed their cooperation with Indian authorities, stating, “We are currently reviewing the details of the notice and are fully cooperating with the Indian tax authorities.” They also emphasized Binance’s commitment to adhering to local laws impacting their operations.
The DGGI, part of the Indian Ministry of Finance, accuses Binance of evading certain tax liabilities during the specified period. This agency, which targets indirect tax evasion, has previously focused on Indian exchanges. However, this is the first notice issued to an international platform like Binance. The notice was sent by the DGGI’s Ahmedabad chapter as a preliminary measure in response to suspected tax rule violations. Binance reiterated its commitment to complying with relevant domestic legislation.
In late 2023, India restricted local access to international exchanges, including Binance, leading tech giants like Apple and Google to remove Binance and related apps from their platforms in India following government directives. Concurrently, India has refined its cryptocurrency taxation framework, introducing a 30% tax on gains from cryptocurrencies and other virtual digital assets in the Union Budget 2022, along with a 1% Tax Deducted at Source (TDS) on transactions exceeding a certain threshold. These tax rates have sparked significant debate within the crypto community regarding their impact on innovation and adoption.
In June, India’s Financial Intelligence Unit fined Binance approximately $2.25 million. Legislative developments specific to cryptocurrencies and Web3 technologies in India are progressing slowly, with potential delays extending into mid-2025. Jayant Sinha, head of the Finance Committee, noted that India requires strong, practical examples of how these new technologies can benefit the country, especially given the rapid changes in global standards and recent market turmoil involving the FTX and Terra debacles.