Binance is facing a demand from Indian authorities for nearly $86 million in unpaid taxes. The Indian government wants Binance to pay this amount in Goods and Services Tax (GST) before it can restart its operations in India.
Binance, along with other foreign crypto exchanges, was banned in India in January 2024 for not following local rules. However, Binance announced in April that it wanted to restart its services in India once it paid the taxes it owed.
On August 6, India’s Directorate General of Goods and Service Tax Intelligence (DGGI) sent Binance a notice demanding $86 million in unpaid GST. The DGGI found that Binance had earned about 4,000 crore Indian rupees (around $480 million) from transaction fees charged to Indian customers, and that this money was credited to a Binance Group Company based in Seychelles.
This is the first time the Indian government has demanded taxes from a crypto exchange. Indian authorities had previously sent email notices to Binance offices in Seychelles, the Cayman Islands, and Switzerland, but Binance did not respond. Binance has now hired local legal help to deal with the tax issue.
In India, crypto service providers must pay a 1% tax on every transaction and a 30% tax on profits from crypto investments. While Indian exchanges like WazirX and CoinDCX have systems in place to handle these taxes, foreign exchanges did not comply.
Binance had initially planned to pay a $2 million fine and resume its services in India. However, the $86 million demand is aimed at covering the fees Binance collected from Indian users while it was operating there.
Indian tax authorities are also targeting other foreign crypto exchanges to ensure they follow local tax laws. Binance is dealing with similar tax evasion issues in other countries, including Nigeria.
