Bybit Implements 18% GST on Indian Crypto Services
Cryptocurrency exchange Bybit is set to introduce higher transaction costs for its Indian users, as it prepares to implement an 18% Goods and Services Tax (GST) across its crypto services and simultaneously discontinues select products. Bybit announced on July 4 that the 18% GST will be applied to various service and trading fees, effective from July 7, 2025. This move is in direct compliance with India’s taxation framework, which mandates Virtual Digital Asset Service Providers to charge this tax to residents of India.
Comprehensive Taxation Across Bybit Services
The newly implemented 18% GST will apply broadly across Bybit’s offerings, affecting spot and margin trading, derivatives, fiat transactions, and crypto withdrawals. The tax will be deducted directly from the assets received by users. For instance, a user selling 1 Bitcoin for 100,000 USDT will now receive 99,882 USDT after a combined deduction of 118 USDT in fees and GST, illustrating the direct financial impact on traders. Unified Trading Accounts will also incur GST on conversion activities, including auto repayments and liquidations, and native staking via On-Chain Earn will see GST deducted from service fees on interest payouts, though APR Boost rewards remain unaffected.
GST Application on Withdrawals and Other Transactions
Crypto withdrawals, including those for recovering incorrectly deposited assets, will now be subject to GST on their respective withdrawal fees. For transactions involving Bybit Pay, fiat buy/sell options, and OTC trading, Bybit has clarified that GST will apply to all transfers between users and merchants, calculated based on the spread. Furthermore, GST will be integrated into the order cost calculation, leading to an increase in the fee components of Initial Margin and Maintenance Margin. This 18% GST is an additional levy on top of India’s existing 30% tax on crypto profits and the 1% Tax Deducted at Source (TDS).
Service Discontinuations for Indian Users
In a parallel development, Bybit will also disable several services specifically for its Indian users starting from July 9. These include legacy crypto loans, the Bybit card, and multiple trading bots such as Spot Grid, DCA, and Futures Combo. Cardholders will be blocked from new transactions by July 17, while any outstanding loans will be automatically repaid. These adjustments reflect Bybit’s strategic response to India’s evolving regulatory landscape, streamlining its offerings to align with the new compliance requirements.
Impact on India’s Crypto Economy Growth
These stringent new regulations are poised to significantly reshape India’s rapidly evolving digital asset landscape. While Bybit’s adjustments are part of a broader compliance strategy, some crypto advocates argue that the rising tax burdens may hinder the growth of India’s domestic crypto economy. Critics suggest that such high taxation could discourage long-term adoption and investment within the country, potentially driving users towards unregulated platforms or international exchanges, thereby impacting India’s potential to become a leading player in the global crypto space.
Compliance Amidst Regulatory Evolution
Bybit’s decision to implement the 18% GST and discontinue certain services underscores the increasing pressure on cryptocurrency exchanges to comply with national tax and regulatory frameworks. This move reflects a global trend where governments are seeking greater oversight and revenue from the digital asset industry. For exchanges operating in multiple jurisdictions, navigating diverse and often complex regulatory requirements necessitates significant operational adjustments and strategic decisions regarding service offerings.
The Future of Crypto Trading in India
The combined effect of increased transaction costs and reduced service availability presents a challenging environment for Indian crypto traders. The additional 18% GST on fees, layered onto existing high taxes on profits and TDS, creates a substantial financial burden that could deter new entrants and incentivize existing users to seek alternatives. The unfolding situation with Bybit highlights the critical need for a clear, consistent, and supportive regulatory framework in India that balances revenue generation with fostering innovation and protecting investor interests in the long term.
