In a significant development, Binance, the world’s largest cryptocurrency exchange, has been served with a Goods and Services Tax (GST) notice in India, demanding a payment of ₹772 crore (approximately $92 million). This notice was issued by the Ahmedabad zonal unit of India’s Directorate General of GST Intelligence (DGGI). Although an official statement from the government is still pending, reliable sources have confirmed this news to Gadgets360.

The issue stems from Binance’s practice of levying fees on Indian traders, which reportedly amounted to ₹4,000 crore and were transferred to a foreign entity. The DGGI’s Ahmedabad unit identified this as a point of concern and subsequently attempted to contact the foreign company to which Binance had transferred these funds. However, their efforts were met with silence, as Binance did not respond to emails or other communication attempts.

An anonymous DGGI official told Gadgets360 that the notice should be viewed as an opportunity for Binance to present its case and align its business operations with India’s legal framework. The official clarified, “Our role at DGGI is to identify issues and issue official notices. This gives the concerned party a chance to defend themselves. The adjudicating authorities, in this case, the Bengaluru Commissionerate, will now oversee the proceedings.”

The Bengaluru Commissionerate’s involvement is crucial because it handles cases involving foreign companies operating in India solely through an internet presence, without any physical office in the country. This case is particularly noteworthy as it marks the first instance of a GST notice being issued to a cryptocurrency exchange in India.

Binance, despite being founded in San Francisco, currently lacks a physical headquarters. In a blog post from June, the company mentioned that it had not yet established its headquarters and was still scouting for potential locations. However, no updates have been provided by Binance since then, and the company has yet to respond to this latest development.

This GST notice adds to the growing list of legal challenges that Binance has faced globally. In November 2023, Binance agreed to settle with the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) for a combined total of $4.4 billion (approximately ₹36,667 crore) for violations of U.S. anti-money laundering and sanctions laws. The U.S. Department of the Treasury described this as the largest settlement in history with Binance.

Binance’s troubles in India are not new either. In June this year, India’s Financial Intelligence Unit (FIU) imposed a fine of $2.25 million (approximately ₹18.8 crore) on the exchange for failing to comply with the Prevention of Money Laundering Act, 2002 (PMLA). Binance claimed to have registered with the FIU in May, just before the fine was levied.

As this situation unfolds, all eyes are on both Binance and the DGGI for their next moves. The outcome could have significant implications for the future of cryptocurrency regulation in India. For Binance, it’s another challenge in their ongoing efforts to navigate the complex global regulatory landscape.