One of the largest crypto exchanges of India, WazirX was recently all over the news for all the wrong reasons. As per the GST department of the Mumbai zone, an investigation was led against WazirX to look into its accounts where it had spotted an alarming tax discrepancy of about Rs 40.5 crore.
Well, the issue was settled immediately as WazirX quickly cleared the outstanding tax along with the penalties which rounded up to a whopping Rs 49.20 crore.
As per the investigations, the tax discrepancy was caused due to WazirX not paying the proper taxes when someone used their native token WRX to buy or sell crypto tokens as they normally do when someone uses the traditional INR to transact.
The GST department further added that they are also looking into other crypto platforms like CoinDCX and CoinSwitch Kuber to find similar such tax discrepancies and take appropriate legal steps against those bodies.
Truth Behind the News Based on Facts
Well, if you have already come across this news via different media platforms. You might notice one odd thing that most of these media outlets have directly painted WazirX to be the villain for purposely evading the hefty tax or even some media outlets reporting that the government is purposely trying to bully the crypto industry by doing all this. So now, let us get to facts and then decide what’s what?
First of all, these kinds of raids and investigation by the GST department is a really common thing and has been happening since the beginning of time to spot any kind of tax discrepancies. Plus, this is also done to track or hunt down any large scale illegal monetary transaction intended for some illegal activity or purpose. Even industries like Tata, Reliance and Adani are no stranger to these raids. Hence, it could be easily said that this raid was not purposely done against any specific industry to cripple it.
Secondly, there is a major difference between the terms, tax evasion due to fraud and non-payment of tax due to interpretational issues or a difference of opinion. For WazirX, it seems it is the second case as they immediately cleared out the whole outstanding tax along with the penalty which they could have easily chosen to challenge legally rather than paying. This would have taken years to solve, but they didn’t.
Further, experts believe that this whole mess happened mainly due to the lack of proper crypto regulations in India. For this, WazirX ended up misinterpreting the current tax laws and hence, not paying the proper tax on their WRX transactions.
That will be all for now folks. Make sure to subscribe to our newsletter to receive weekly updates on all kinds of interesting topics.