The DGCI is reportedly cracking down on cryptocurrency exchanges across India

According to sources, the Directorate General of GST Intelligence has cracked down hard on cryptocurrency exchanges operating in the country following the significant tax fraud by bitcoin service provider 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," sources told ANI.

Wallets and exchanges for digital assets such as Bitcoin, Ethereum, Ripple, and others are platforms where merchants and customers can deal.

During the Mumbai CGST and DGGI's crackdown on cryptocurrency trade, roughly Rs. 70 crore worth of tax evasion was discovered, according to sources.

"The DGGI is investigating CoinSwitch Kuber by M/s Bitcipher Labs LLP, CoinDCX by M/s Neblio Technologies Pvt. Ltd., BuyUCoin by M/S I Block Technologies Pvt. Ltd. and Unocoin by M/s Unocoin Technologies Pvt. Ltd," sources said.

Official sources further said, "They are providing facilitation intermediary services for buying and selling of crypto coins. These services attract GST rate of duty of 18 percent which all of them have been evading."

Another official source, who was part of this search, told ANI, "These service providers were charging a commission for their facilitation to indulge in exchange of bitcoins but were not paying GST tax. These transactions were intercepted by DGGI and they were confronted with evidence that proved non-payment of GST."

According to ANI, they paid between Rs. 30 crore and Rs. 40 crore in GST, interest, and penalties for non-compliance with GST law's statutory restrictions. The CBIC has collected Rs. 70 crore from cryptocurrency service providers, including WazirX, for breaking GST legislation.

On Friday, the GST Mumbai East Commissionerate of the Mumbai Zone discovered Rs. 40.5 crore in GST evasion from cryptocurrency exchange WazirX and reclaimed Rs. 49.20 crore in cash for GST evasion, interest, and penalty.

According to CoinDCX, its crypto app allows users to buy bitcoin and other cryptocurrencies in India instantaneously and has over 7.5 million users, over one crore downloads, and over Rs. 7 billion in cryptos purchased.

BuyUcoin, based in Delhi-NCR, India, has over one million users and has traded over $800 million, according to the website, whose CoinSwitch Kuber trading platform has handled over $5 billion (approximately Rs. 37,260 crore) (roughly Rs. 5,960 crore).

Unocoin, a platform for trading Bitcoin, Ether, Tether, and other crypto assets, has offices in Bangalore that have processed more than 10 million transactions, according to their website.