Binance Served Notice for Rs. 772 Crore in GST Charges by DGGI in India

The Ahmedabad zonal unit of India’s Directorate General of GST Intelligence (DGGI) issued the notice to the multi-national crypto exchange.

Written by Radhika Parashar, Edited by Manas Mitul | Updated: 6 August 2024 16:23 IST

Binance Served Notice for Rs. 772 Crore in GST Charges by DGGI in India

Photo Credit: Facebook/ Binance

Binance has not yet responded to the development

Highlights

Binance was founded in July 2017
The exchange has had run-ins with authorities in the US as well
India recently fined Binance for violating anti money laundering laws

Binance, touted as the largest crypto exchange in the world, has been issued a notice in India, demanding a Goods and Services Tax (GST) payment of Rs. 772 crore (roughly $92 million). The Ahmedabad zonal unit of India's Directorate General of GST Intelligence (DGGI) is the authority that has issued this notice to the multi-national crypto exchange. While an official statement from the government remains awaited for now, government sources familiar with the matter have confirmed the development to Gadgets360.

Binance stares at the significantly large GST amount for levying a fee charge on Indian traders that reportedly reached the amount of at least Rs 4,000 crore and was transferred to a foreign-based company.

The Ahmedabad zonal unit of the DGGI, as per reports, identified a point of investigation in Binance, after which it tried reaching out to the company to which Binance had transferred the funds. The Indian officials, however, did not receive any response to their emails and other attempts of communication.

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In conversation with Gadgets360, an official said the notice issued to Binance should be seen by the exchange as an opportunity to present their front of the case and bring their business operations in alignment with India's legal framework.

“We at DGGI are tasked with identifying an issue and then sending an official notice. This is done to give the party concerned an opportunity to defend themselves. Now, from here on, the adjudicating authorities will oversee the proceedings. In this case, the Bengaluru Commissionerate will be the adjudicating authority because that office deals with cases linked to foreign companies that operate in India solely through an Internet presence and no office,” the official said on the condition of anonymity.

It seems that Binance, despite being founded in San Francisco, US, does not have a physical headquarter for now. In June, the company blog post had said that Binance had not established its headquarters and were scouting for locations. There has been no official update on the situation from Binance in the last three months.

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For now, an official update from the New Delhi-based DGGI headquarters on the matter remains awaited. Binance has also not reacted to the development yet.

The case reportedly marks the first time that a GST notice has been issued to a crypto exchange in India. For Binance, however, financial settlements with the governments are not a new riddle to be figured out.

Back in November 2023, Binance had settled with FinCEN and OFAC on penalties worth $3.4 billion (roughly Rs. 28,541 crore) and $968 million (roughly Rs. 8,126 crore), respectively. The US department of the treasury, at the time, had released an official statement detailing the largest settlement in history with Binance for violations of US' anti money laundering and sanctions laws.

In India as well, Binance's history has not been at all stain-free. In June this year, for instance, India's Financial Intelligence Unit (FIU) imposed a fine of $2.25 million (roughly Rs. 18.8 crore) on the crypto exchange for not adhering to the Prevention of Money Laundering Act, 2002 (PMLA).

Binance claimed that it registered with the FIU in May this year.

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Further reading: Cryptocurrency, Binance, GST, Crypto India

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More