Binance, the world’s largest cryptocurrency exchange, has “challenged” a nearly $86 million tax showcause notice from India’s Directorate General of Goods and Services Tax Intelligence (DGGI), a person directly involved with the matter told CoinDesk.

DGGI’s chapter from the western city of Ahmedabad issued the showcause notice to Binance last week for collecting fees from Indian customers trading on its platform, the person said. The time period within which the tax was evaded, according to the person, is between July 2017 and March 2024.

The DGGI is a body entrusted with the task of “collection, collation and dissemination of intelligence relating to evasion of indirect tax.” The DGGI functions under the purview of the all-powerful Ministry of Finance.

“We are fully cooperating with the Indian authorities to address any concerns,” a Binance spokesperson told CoinDesk via email. “We would like to clarify that Binance is, and has always been, committed to adhering to relevant domestic legislations applicable to us.”

DGGI did not immediately respond to a CoinDesk request for comment.

In June 2024, Binance was fined approximately $2.2 million for providing services to Indian clients without adhering to the nation’s anti-money laundering rules but this process also saw Binance winning approval from India’s Financial Intelligence Unit (FIU) as a registered entity earlier this year.

The DGGI started an investigation independent from the FIU and now that the matter has been challenged, we have to wait and see how things proceed in the process because the services provided fall under the category of the Online Information and Database Access or Retrieval Services (OIDAR), the person said. OIDAR type services are provided through the medium of internet and received by the recipient online without having any physical interface with the supplier of such services. The purpose of the categorization is to avoid giving an unfair advantage to overseas service providers over an Indian service provider.

Binance “reportedly” earned more than $476 million (4,000 crore) in transaction fees transferred to a Binance Group Company, Nest Services Limited, based in Seychelles, the Economic Times reported citing a top source privy to the development.

This is not the first time the DGGI has taken action against Indian crypto exchanges but this may be the first time it has issued a showcause notice to an international crypto exchange.

Read More: The Inside Story of How India’s Crypto Exchanges Were ‘Inspected’ by Tax Agencies

UPDATE (August 6, 07:20 UTC): Adds context and more information throughout.

UPDATE (August 6, 07:26 UTC): Adds comment from Binance spokesperson.