The Indian government’s move to block the URLs of nine offshore exchanges and issue show-cause notices to them on Thursday followed an official request for the same from the advocacy organization of the Indian crypto and Web3 group, as per the letter.
The letter, dated December 16, was written by Dilip Chenoy, the Chairman of the Bharat Web3 Association (BWA), and it was sent to Sanjay Malhotra, the Department of Revenue Secretary of the Indian Finance Ministry.
According to an anonymous source who was not authorized to talk on the subject, the offshore exchanges have been given two weeks to answer the show cause notice, which asks why proceedings against them shouldn’t be taken.
On the other hand, the BWA letter requested a grace period of one month for offshore exchanges to register with the Finance Ministry of India’s Financial Intelligence Unit (FIU).
The action was taken in response to the nation’s crippling levies on the cryptocurrency business, which include a 30% tax on profits and a 1% tax deducted at source (TDS) on all transactions. Since then, Indian cryptocurrency exchanges have been operating in survival mode and attempting to expand their business.
In addition, the BWA letter requested that the government require the offshore exchanges to create an Indian subsidiary or entity, require the deposit of applicable TDS beginning on July 1, 2022, and, in the event of non-compliance, block the IP addresses of these platforms and restrict access to them on mobile app stores.
It’s unclear if the BWA feature in the show cause notices is responding to every request.
Most importantly, before imposing any restrictions, the letter requested that the government grant Indian retailers a 30-day window to remove their assets.
Also Read: India’s Income Tax Intensifies Crypto Tax Scrutiny
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