Binance is reportedly facing new regulatory challenges in India.
According to local media, The Times of India, the Ahmedabad zonal unit of the Directorate General of GST Intelligence (DGGI) has issued a show cause notice to Binance, demanding payment of 7.22 billion rupees (approximately $86 million) in goods and services tax (GST).
The notice alleged that Binance collected fees from Indian users for trading virtual digital assets on its platform without proper registration under the Indian GST framework. The Times of India report indicated that services like this, which are internet-based services with minimal human intervention, fall under the online information database access or retrieval (OIDAR) services category and are subject to specific GST rules in India.
Binance reportedly earned around 40 billion rupees (approximately $476.8 million) from transaction fees charged to Indian customers. These earnings were reportedly credited to Nest Services Limited, a Binance Group company based in Seychelles.
The Times of India also reported that following the issuance of the notice, the DGGI reached out via email to Binance’s affiliates in Seychelles, the Cayman Islands, and Switzerland, seeking compliance but received no response. However, Binance has reportedly engaged a local counsel to address the issue with the DGGI.
This development comes in the wake of other regulatory challenges for Binance in India. In May 2024, the Financial Intelligence Unit of India (FIU) approved Binance’s registration as a Virtual Asset Service Provider (VASP) in India after it was banned in January for regulatory violations and failing to register. However, the same regulator fined the crypto exchange a record 188.2 million rupees (approximately $2.25 million) in June for failing to comply with the local anti-money laundering (AML) regulations.
As of press time, Binance had not publicly commented on the GST demand.
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