Binance, the world’s largest crypto exchange, is challenging a substantial tax notice issued by Indian authorities. The Directorate General of Goods and Services Tax Intelligence (DGGI), an agency under India’s Ministry of Finance, has issued a show-cause notice to Binance for nearly $86 million in taxes.
The notice is the first formal step when tax rule violations are suspected and relate to fees collected from Indian customers between July 2017 and March 2024.
Binance alleged to have earned over $476 million
At the heart of the issue is the classification of Binance’s services under the Online Information and Database Access or Retrieval Services (OIDAR) category. This classification is designed to level the playing field between overseas and Indian service providers in the digital space.
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According to reports, Binance is alleged to have earned over $476 million in transaction fees from Indian users, which were transferred to Nest Services, a Binance Group company based in the Seychelles. This transfer of funds across borders has caught the attention of Indian tax authorities.
Binance has stated its commitment to adhering to relevant domestic legislation, indicating its willingness to engage with regulatory bodies. However, the challenge to this tax notice suggests that the exchange sees grounds for dispute in the DGGI’s assessment. This case is particularly important, as it may be the first time DGGI has issued such a notice to an international crypto exchange.
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