New Delhi, Wednesday, August 21, 2024-Indian tax authorities have issued an $86 million tax demand to Binance under the Goods and Services Tax (GST) framework as the cryptocurrency exchange attempts to reestablish its presence in India, reports said.
The demand comes after Binance, facing regulatory challenges, resumed operations in the country on August 15, 2024, coinciding with India’s 78th Independence Day.
The tax dispute dates back to December 2023, when India’s Financial Intelligence Unit (FIU) issued notices to multiple offshore crypto exchanges, including Binance, for operating without proper registration as “reporting entities.”
This lack of compliance led to the removal of Binance’s mobile app from Indian app stores and allowed users to circumvent tax laws, including the 1% Tax Deducted at Source (TDS) and a 30% tax on crypto transactions.
In response to these challenges, Binance has taken steps to address regulatory concerns.
In April 2024, the company paid a $2.25 million fine to the FIU for violating Anti-Money Laundering (AML) regulations.
Binance has also committed to adhering to all tax reporting processes and strengthening its AML and counter-terrorism financing controls.
As part of its efforts to comply with Indian regulations, Binance has announced plans to establish a Financial Crimes Compliance unit to assist Indian authorities in investigating crypto-related crimes and to enhance the collaborative security within the ecosystem.
Binance has faced significant regulatory challenges globally, including in Nigeria, where the government has been cracking down on unregistered cryptocurrency operations.
In June 2023, Nigeria’s Securities and Exchange Commission (SEC) declared Binance Nigeria Limited illegal, stating that it was not registered or regulated by the SEC, leading to increased scrutiny and legal pressures on the exchange.
