Binance Fights $86M Tax Notice From India’s DGGI Over Compliance Issues

• Binance disputes an $86 million tax notice from India's Directorate General of Goods and Services Tax Intelligence.  
• Binance is accused of collecting fees from Indian customers without GST registration from 2017 to 2024.  
• The investigation classifies Binance's earnings as OIDAR, complicating their tax obligations in India.  

Allegations and Non-Compliance

Efforts to Comply and Ongoing Issues

Binance has faced criticism for not fully following Indian regulations, which led to a tax leak and an initial ban. Reports say Binance did not comply with the 1% tax deducted at source (TDS) on registered exchanges, giving it an advantage over others. The current investigation by DGGI focuses on Binance's failure to register for GST. It is separate from the FIU and classifies Binance's services as Online Information and Database Access or Retrieval Services (OIDAR). These services are delivered online without any direct contact with the supplier.

OIDAR Classification and Financial Implications

Reports show Binance earned more than $476 million in transaction fees, which were sent to a Binance Group Company, Nest Services Limited, in Seychelles. Classifying this revenue under OIDAR services adds more complexity to Binance's tax obligations in India.

Binance's attempts to comply with Indian rules have been difficult. The exchange's approach to following regulations has caused concern among Indian authorities. The investigation by DGGI is a significant step in ensuring compliance with the GST framework. Binance's challenge to the $86 million tax notice highlights the complex issues of regulating digital asset exchanges worldwide