Cryptocurrency exchange Binance is facing a significant tax challenge in India after the country’s tax authorities issued a notice demanding a Goods and Services Tax (GST) payment of $86 million.
The Directorate General of GST Intelligence alleges that Binance collected fees from Indian customers for trading virtual digital assets without remitting the appropriate taxes, according to a local news outlet.
The tax demand stems from the company's classification as an online information database access or retrieval (OIDAR) service provider, which is subject to GST in India.
Binance's earnings from transaction fees charged to Indian customers were substantial, reportedly amounting to at least $476 million, according to the Times of India report. The report said the fees were credited to Nest Services Limited, a Binance Group Company based in Seychelles.
"We are aware of certain media reports circulating regarding tax notices being issued by Indian GST authorities to global crypto platforms,” a Binance spokesperson told Decrypt. “We would like to clarify that Binance is, and has always been, committed to adhering to relevant domestic legislations applicable to us."
The spokesperson added that Binance is “cooperating” with the Indian authorities to address any concerns.
This tax bill comes in the wake of a turbulent period for Binance in India.
The exchange faced a ban by the Indian government in January 2024 due to non-compliance issues. However, it subsequently received approval from India's Financial Intelligence Unit to operate as a virtual asset service provider (VASP) and resumed operations.
This tax dispute in India is not an isolated incident for Binance.
The company is currently facing similar challenges in other jurisdictions, including Nigeria, where it is embroiled in legal battles related to tax evasion.
The tax evasion case has been touch and go in Nigeria, where one of the company's executives is still being detained in prison.
Edited by Stacy Elliott.