India’s Goods and Services Tax framework for cryptocurrency exchanges has evolved through three distinct enforcement rounds documented in official parliamentary replies: a 2022 investigation of 11 exchanges, a December 2022 investigation of 12 exchanges, and the most recent and largest disclosure from December 2024 covering 17 exchanges with a cumulative evasion figure of Rs 824.14 crore. Each round reveals the same structural gap: the 18% GST on crypto exchange service fees is legally applicable and officially enforced, yet the detection-to-recovery ratio remains strikingly low, with less than 15% of detected evasion recovered in the most recent round.
The GST regime for crypto services in India applies at the maximum slab rate of 18% under HSN code 960899, classified as “other miscellaneous articles,” because no dedicated GST code or rate has been prescribed for virtual digital assets or digital exchange services by the GST Council. Exchange service fees, trading commissions, deposit and withdrawal charges, and staking service fees all attract 18% GST. Offshore platforms serving Indian users are classified as Online Information and Database Access or Retrieval (OIDAR) service providers under Section 14 of the IGST Act, 2017, making them compulsorily liable to register for GST and collect the 18% tax from Indian users irrespective of turnover thresholds that apply to domestic businesses.
The practical impact became tangible for Indian traders on July 7, 2025, when Bybit announced it would begin charging 18% GST on all service fees for Indian users, becoming the first major international exchange to formally declare GST compliance. In the 2026 budget, Finance Minister Nirmala Sitharaman added a dedicated penalty framework under amended Section 446 of the Income-tax Act, 2025 for crypto-asset reporting lapses, signalling continued tightening of the compliance infrastructure surrounding digital asset services.
At KoinX, we help crypto investors and tax professionals track and account for India’s multi-layered crypto tax obligations including GST on exchange fees, and the enforcement data below reflects the compliance challenge the government is systematically working to address.
This article is sourced exclusively from primary government disclosures: Lok Sabha and Rajya Sabha written replies by the Ministry of Finance, official parliamentary statements, the CGST Act 2017 and IGST Act 2017 as administered by the Central Board of Indirect Taxes and Customs (CBIC), the Finance Bill 2026, and official government press releases. All figures are stated in Indian Rupees unless otherwise noted.
Scope and Methodology
This article covers India-specific statistics on the 18% GST applicable to crypto exchange services, government-detected GST evasion by cryptocurrency exchanges across three parliamentary rounds, individual investor GST investigations, recovery amounts including penalties and interest, and compliance classification under the IGST Act. All primary data was published within the last two years, except for parliamentary disclosures from 2022 that establish the chronological baseline, which are included because no more recent equivalent data on the early enforcement rounds has been published.
Parliamentary written replies by the Minister of State for Finance Pankaj Chaudhary constitute the primary government source for all GST evasion and recovery figures. Business Standard’s reporting of those Lok Sabha and Rajya Sabha replies is cited because it reproduces the official figures verbatim, as is consistent with parliamentary question documentation. The Deccan Herald’s December 2022 reporting cites the same official Lok Sabha reply for the 12-exchange round.
Recency was enforced where more recent data exists: the December 2024 parliamentary reply (17 exchanges, Rs 824.14 crore) supersedes prior rounds and is cited as the current cumulative figure. Prior rounds are included for chronological context. The article does not include estimated GST revenue from crypto services industry-wide, as no such official estimate has been published by CBIC.
India Crypto GST at a Glance: Key Numbers
- The government detected GST evasion of Rs 824.14 crore across 17 cryptocurrency exchanges as of December 2, 2024, with only Rs 122.29 crore recovered including interest and penalties, based on a 2024 written reply to Lok Sabha by Minister of State for Finance Pankaj Chaudhary on Lok Sabha Unstarred Question No. 966.
- Nest Services Ltd, a Binance group company, accounted for Rs 722.43 crore of the Rs 824.14 crore in total detected GST evasion, representing approximately 87.7% of the total detected amount, with no recovery made as of December 2, 2024, based on the 2024 Ministry of Finance Lok Sabha written reply.
- Zanmai Labs Pvt Ltd (WazirX) was detected with Rs 40.51 crore in GST evasion, from which Rs 49.18 crore was recovered including interest and penalty, based on the 2024 Ministry of Finance Lok Sabha written reply.
- CoinDCX was detected with Rs 16.84 crore in GST evasion, with Rs 20.86 crore recovered including interest and penalty, and CoinSwitch Kuber was detected with Rs 14.13 crore in GST evasion, with Rs 19.38 crore recovered, based on the 2024 Ministry of Finance Lok Sabha written reply.
- GST authorities investigated 4 individual investors in virtual digital assets and detected GST evasion of Rs 1.76 crore, recovering Rs 2.40 crore including taxes, penalties, and interest, based on the 2024 Ministry of Finance Lok Sabha written reply.
- Crypto exchange services in India attract 18% GST classified under HSN code 960899 as “other miscellaneous articles,” the highest GST slab in this category, as confirmed by the 2024 Ministry of Finance written reply to Lok Sabha.
- GST applies to crypto exchange service fees, commissions, trading fees, deposit fees, and withdrawal fees but not to the value of the underlying crypto asset itself, based on the Ministry of Finance’s 2024 Lok Sabha written reply describing the detected evasion mechanism at crypto exchanges.
- Under the Finance Bill 2026, entities required to furnish crypto-asset transaction statements under Section 509 of the Income-tax Act, 2025 face a penalty of Rs 200 per day for non-furnishing and Rs 50,000 for inaccurate particulars not corrected, effective April 1, 2026, based on Finance Minister Nirmala Sitharaman’s budget speech and Finance Bill 2026 reported by Business Standard on February 1, 2026.
GST Evasion Detection by Parliamentary Round
- In the first parliamentary disclosure on March 28, 2022, the government detected GST evasion of Rs 81.54 crore across 11 cryptocurrency exchanges and recovered Rs 95.86 crore including interest and penalties, based on the Lok Sabha written reply by Minister of State for Finance Pankaj Chaudhary on March 28, 2022.
- The 11 exchanges investigated in the 2022 first round included Zanmai Labs (WazirX), CoinDCX, CoinSwitch Kuber, Buy Ucoin, UnoCoin, Flitpay, Zeb IT Services, Secure Bitcoin Traders, Giottus Technologies, Awlencan Innovations India (Zebpay), and Discidium Internet Labs, based on the Lok Sabha written reply by Minister of State for Finance Pankaj Chaudhary on March 28, 2022.
- In the second parliamentary disclosure on December 19, 2022, the government detected GST evasion of Rs 87.60 crore across 12 cryptocurrency exchanges and recovered Rs 110.97 crore including interest and penalties, with 8 cases still under investigation and 4 cases closed on payment, based on the Lok Sabha written reply by Minister of State for Finance Pankaj Chaudhary.
- In the third and largest parliamentary disclosure on December 2, 2024, the government detected GST evasion of Rs 824.14 crore across 17 cryptocurrency exchanges and recovered Rs 122.29 crore including interest and penalties, based on the Lok Sabha Unstarred Question No. 966 written reply by Minister of State for Finance Pankaj Chaudhary.
- The 2024 disclosure confirmed that 47 VDA Service Providers had registered as reporting entities with FIU-IND under PMLA at the time of the parliamentary reply, based on the 2024 Ministry of Finance Lok Sabha written reply.
Exchange-Wise GST Evasion and Recovery Statistics (2024 Parliamentary Data)
- Nest Services Ltd (Binance group): GST evasion of Rs 722.43 crore detected, Rs 0 recovered as of December 2, 2024, based on the 2024 Ministry of Finance Lok Sabha written reply.
- Zanmai Labs Pvt Ltd (WazirX): GST evasion of Rs 40.51 crore detected, Rs 49.18 crore recovered including interest and penalty, based on the 2024 Ministry of Finance Lok Sabha written reply.
- CoinDCX (Neblio Technologies): GST evasion of Rs 16.84 crore detected (noted as Rs 26.63 crore combined with its FIU-registered entity in some accounts), Rs 20.86 crore recovered, based on the 2024 Ministry of Finance Lok Sabha written reply.
- CoinSwitch Kuber: GST evasion of Rs 14.13 crore detected, Rs 19.38 crore recovered including interest and penalty, based on the 2024 Ministry of Finance Lok Sabha written reply.
- The 17 exchanges investigated in the 2024 round represented a significant escalation from the 11 exchanges in 2022 and 12 exchanges in December 2022, reflecting widening enforcement scope, based on the three successive Ministry of Finance parliamentary written replies.
GST Classification and Applicable Rate for Crypto Services
- No dedicated HSN code or GST rate has been prescribed by the GST Council for virtual digital assets, digital cryptocurrencies, or crypto exchange services; HSN code 960899 under “other miscellaneous articles” with an 18% GST rate is applied by default, as confirmed by the Ministry of Finance’s 2024 Lok Sabha written reply.
- Services provided by cryptocurrency exchanges to Indian users are classified as Online Information and Database Access or Retrieval (OIDAR) services under Section 14 of the IGST Act, 2017, requiring both domestic and offshore platforms to mandatorily register for GST and collect 18% tax from Indian recipients irrespective of whether turnover exceeds standard registration thresholds, based on the IGST Act 2017 as administered by CBIC.
- Under Section 24 of the CGST Act, 2017, every person supplying OIDAR services from outside India to an Indian person other than a registered person is compulsorily required to register for GST, making offshore crypto exchanges serving Indian users mandatorily liable to charge and remit 18% GST on service fees, based on the CGST Act 2017.
- The GST Act does not currently define “cryptocurrency” or “digital assets” as terms; the Ministry of Finance’s 2024 Lok Sabha written reply confirmed that the term “virtual digital asset” applicable to the direct tax regime was introduced through the Finance Budget but does not yet carry a corresponding specific GST classification.
- GST liability for crypto exchange service providers applies only to entities with aggregate annual turnover exceeding Rs 40 lakh or to entities who have voluntarily registered, with the exception of OIDAR providers who must register regardless of turnover, based on the Ministry of Finance’s 2024 Lok Sabha written reply.
GST on Offshore Exchanges and OIDAR Compliance Statistics
- Bybit announced on July 7, 2025 that it would begin charging 18% GST on all service fees for Indian users from July 7, 2025, applying the tax to spot trading, margin trading, derivatives, fiat transactions, withdrawals, and staking service fees, making it one of the first international exchanges to formally declare GST compliance for Indian users.
- Bybit reported that over 310,000 active Indian users would be directly affected by the July 7, 2025 application of 18% GST on service fees, based on the official Bybit announcement.
- The 18% GST on Bybit’s service fees applies to spot and margin trading fees, derivatives trading fees, fiat deposit and withdrawal charges, staking service fees, platform service fees, and loan settlements for Indian resident users, based on Bybit’s official announcement of July 5, 2025.
- Under the OIDAR framework, offshore crypto exchanges serving Indian users must file monthly returns in Form GSTR-5A on or before the 20th day of the month succeeding each calendar month, collecting and remitting 18% IGST on fees charged to Indian users, based on CGST Rules 2017 Rule 64.
GST Council Deliberations on Crypto Rate
- The GST Council’s law committee examined a proposal in May 2022 to levy 28% GST on all cryptocurrency-related transactions, classifying crypto activities on par with lotteries, betting, casinos, and horse racing, based on CNBC TV18 reporting of sources familiar with the GST Council’s internal deliberations from May 2022.
- Crypto exchanges in India were classified as “intermediary services” attracting 18% GST at the time of the May 2022 GST Council discussions, with the law committee examination targeting a potential reclassification under a separate head, based on CNBC TV18 reporting of the GST Council’s law committee discussions.
- The 18% GST rate on crypto exchange services under the financial services category remains in force as of 2026, with no formal notification from the GST Council or CBIC implementing the proposed 28% rate on crypto transactions that was under examination in 2022, based on the Ministry of Finance’s 2024 Lok Sabha written reply confirming 18% as the applicable rate.
Compliance Enforcement and Penalty Framework Statistics
- Under-reporting or misreporting of income from VDA transactions including failure to account for applicable GST can attract penalties of 50% to 200% of the tax evaded, and imprisonment of up to 7 years in wilful evasion cases, under the Income Tax Act provisions administered by CBDT, as confirmed by the Finance Act 2022 penalty framework.
- The Finance Bill 2026, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, introduced a penalty of Rs 200 per day for non-furnishing of crypto-asset transaction statements under Section 509 of the Income-tax Act, 2025, and a flat penalty of Rs 50,000 for furnishing inaccurate particulars and failing to correct them, effective from April 1, 2026, based on the Finance Bill 2026 and Business Standard reporting.
- The Finance Bill 2026 amended Section 446 of the Income-tax Act, 2025 to create a new penalty provision titled “Penalty for failure to furnish information or for furnishing inaccurate information on transaction of crypto-asset,” targeted at prescribed reporting entities rather than individual traders, based on the Finance Bill 2026 analysis published by CACLUBINDIA.
- The GST liability of VDA exchange service providers applies to all entities required to register under the GST Act, while individual retail investors casually trading for personal investment generally do not need GST registration unless their activities constitute a taxable supply as part of a business, based on the CBIC classification framework as applied to crypto exchange services.
- Input Tax Credit under GST can be claimed by crypto exchange businesses for GST paid on business-related services and expenses including consultancy fees, software expenses, broker commissions, and mining costs, but is typically not available to individual retail investors, based on the GST Act provisions as applicable to VDA service providers.
References
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