Most cryptocurrencies are prone to extreme price fluctuations. But in the case of last week’s bloodshed, an unexpected participant played truant. Stablecoins are usually considered to be the calmer, steadier cousin of the otherwise volatile cryptocurrencies. (Representational Photo)
In a written reply to query in Lok Sabha, MoS Finance Pankaj Chaudhary said recovery from the crypto bourses, including interest and penalty, is Rs 95.86 crore
The government had initiated action against 11 cryptocurrency exchanges, including CoinDCX and CoinSwitch Kuber, in the country for tax evasions of Rs 81.54 crore, Minister of State for Finance Pankaj Chaudhary said on Monday.
In a written reply to a query in the Lok Sabha, Chaudhary said that recovery from the cryptocurrency exchanges, including interest and penalty charges, stands at Rs 95.86 crore.
The government also said it did not collect any data on cryptocurrency exchanges.
Pratik Gauri, founder of 5ireChain, a blockchain ecosystem, said the government is “trying to find a foothold in understanding the various challenges it will face in implementation once regulations are in place”.
Chaudhary said that few cases of GST evasion by crypto exchanges had been detected by central GST formations.
He added that 11 cryptocurrency exchanges were investigated due to tax evasions and Rs 95.86 crore were collected, including the interest and penalty charges.
In the case of CoinDCX, Rs 15.7-crore tax evasion was under the investigation. About Rs 17.1 crore has been recovered, including interest and penalty, according to the Lok Sabha reply.
Buy Uncoin was involved in a Rs 1.05-crore tax evasion case and Rs 1.1 crore have been recovered. The CoinSwitch Kuber case involved Rs 13.76 crore tax evasion and a recovery of Rs 16.07 crore has been made.
Awlencan Innovations India (Zebpay) was involved in a tax evasion of Rs 2.01 crore, and Rs 2.5 crore have been recovered. UnoCoin is under the investigation related to a tax evasion of Rs 2.97 crore, and 4.44 crore has been recovered.
Earlier this year, the Directorate General of GST Intelligence also came down heavily on cryptocurrency exchanges in the country following massive GST evasion by cryptocurrency exchange WazirX.
“Around half dozen offices of Cryptocurrency Service providers have been searched and massive Goods and Service Tax (GST) evasion has been detected by DGGI,” news agency ANI had reported.
In the Budget 2022, Finance Minister Nirmala Sitharaman on February 1 announced that profit from any virtual digital asset will be taxed at 30 per cent, without any loss setoff. She said no deduction of any expenditure or allowance will be allowed while computing such income, except the cost of acquisition.
Last week also, the government clarified that losses arising out of the transfer of virtual digital assets cannot be set off against gains from another. It also said that mining costs cannot be treated as acquisition costs.
Currently, the legal position of cryptocurrencies is not clear in the absense of any law regulating them. After the government’s tax proposal on the cryptocurrencies, investors said the provisions have effectively legalised crypto trading. However, Sitharaman has said taxing cryptocurrencies does not mean it has been legalised. The matter is still being considered.
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