Home » Blockchain Indian taxman recovers $6.62M from WazirX for evading tax on commission Blockchain Reading 3 min Views 6 Government officials from CGST Mumbai Zone recovered the funds from crypto exchange WazirX after detecting a GST evasion of $5.43 million on trade commissions. Indian crypto exchange WazirX has reportedly paid over $6.6 million (49.2 crore rupees) following non-payment of Goods and Services Tax (GST) on trade commissions. The total recovery includes the pending tax of $5.43 million (40.5 crore rupees), the interest and a penalty for non-payment. Government officials from the Central GST and Central Excise committee (CGST Mumbai Zone) recovered the funds from the crypto exchange after detecting a GST evasion of $5.43 million on the commissions. A typical GST fraud involves creating fake invoices without actually moving the goods between the seller and the buyer. Officers of CGST Mumbai East comm'te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai — CGST Mumbai Zone (@cgstmumbaizone) December 30, 2021 According to local media Economic Times, the tax department detected that WazirX uses its in-house WRX tokens for commissions, which were distributed by Zanmai Labs. Further investigation revealed that the crypto exchange missed out on paying 18% tax on the total tokens issued based on its market price. The investigators revealed that WazirX paid GST on the 0.2% commission it charges users for making trades with local currency i.e. the rupee, clarifying: Day 1000 What a milestone for Indian Crypto! With #IndiaWantsCrypto my mission has been: – Bring positive crypto regulation in India– Spread right information about Crypto Lakhs of people have joined this campaign Let’s continue our mission Jai Hind 🇮🇳#IndiaWantsCrypto — Nischal (WazirX) ⚡️ (@NischalShetty) July 28, 2021 While the concept of GST is fairly new in the region, the government of India has previously agreed to show leniency to defaulters and fraudsters — typically settling such cases with a monetary penalty and a lower probability of jail time. Zanmai Labs spokesperson concluded: “We strongly believe that regulations will 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.” In an attempt to help the Indian government decide crypto laws, the Confederation of Indian Industries (CII) proposed to treat cryptocurrencies as securities of a special class. A report released by the non-government trade association showed the CII proposes to formulate new regulations around the nascent crypto market instead of regulating them under existing securities law. As Cointelegraph reported, the CII recommended a special provision of income tax and GST laws, which will treat cryptocurrencies as an asset class for tax purposes unless specifically treated as “stock in trade“ by a participant.