Bybit Imposes 18% GST on Indian Users Amid Tax Crackdown

Bybit, a prominent cryptocurrency exchange, has announced that it will impose an 18% Goods and Services Tax (GST) on service and trading fees for all its users in India. This decision, effective from July 7, 2025, comes as part of a broader tax crackdown on the cryptocurrency industry in India. The move is in response to the Indian government's recent tax policies, which have increased scrutiny and regulation on digital assets. Bybit's announcement underscores the growing pressure on cryptocurrency exchanges to comply with local tax laws, even as the industry continues to evolve and attract new users.

The implementation of the 18% GST on trading, staking, and withdrawal fees will significantly impact Indian users of Bybit. This tax will be applied to all transactions, making it more expensive for users to engage in cryptocurrency activities on the platform. The decision reflects the Indian government's efforts to bring the cryptocurrency sector under its tax net, ensuring that digital asset transactions are subject to the same tax regulations as traditional financial activities.

In addition to the GST implementation, Bybit will discontinue several products for Indian customers starting July 9. These include legacy crypto loans, which users must settle by July 17, after which auto repayment will be enforced for any outstanding balances. The Bybit Card will no longer accept new applications, and existing cards will be blocked from new transactions from July 17, followed by deactivation. Various trading bots will also be terminated on July 9.

The broader tax crackdown in India is part of a larger trend of increased regulation and taxation of the cryptocurrency industry globally. Governments around the world are grappling with how to regulate digital assets, which have gained popularity but also raised concerns about money laundering, tax evasion, and market volatility. Bybit's decision to comply with Indian tax laws is a strategic move to avoid potential legal issues and maintain its operations in the region.

India already enforces a strict crypto tax regime, including a 30% capital gains tax on profits and 1% TDS on each transaction since 2022. Recently, the Income Tax Department ramped up enforcement, targeting users for underreporting crypto income through its “NUDGE” compliance campaign. Taxpayers have been flagged for mismatches between their returns and data from exchanges. Under current rules, crypto losses can’t be offset, and deductions aren’t allowed.

Now, with the additional 18% GST on service and trading fees, the overall tax burden on crypto transactions in India increases even more, raising concerns about its potential impact on market participation and user sentiment. Over 310,000 active Indian users on Bybit are expected to be affected by this new tax structure.

The impact of this tax on Indian users remains to be seen, but it is likely to affect the overall trading volume and user engagement on the Bybit platform. Users may seek alternative exchanges that offer lower fees or more favorable tax conditions. However, Bybit's compliance with local regulations could also enhance its credibility and trustworthiness among Indian users, who value transparency and legal compliance.

In summary, Bybit's decision to impose an 18% GST on Indian users is a direct response to the Indian government's tax policies on cryptocurrencies. This move highlights the increasing regulatory pressure on the cryptocurrency industry and the need for exchanges to adapt to local tax laws. While the tax may impact user behavior and trading volumes, it also positions Bybit as a compliant and trustworthy platform in the Indian market.