Bybit Imposes 18% GST on Indian Users' Trading Fees

Bybit, a leading global cryptocurrency exchange, has announced the implementation of an 18% Goods and Services Tax (GST) on all trading and service fees for its users in India, effective from July 7, 2025. This decision is a response to new regulatory requirements imposed on the country's digital asset market. The taxation measure applies to a wide range of services, including trading fees, withdrawals, staking, and fiat deposits, among others. This move is aimed at ensuring compliance with Indian tax laws for virtual digital asset (VDA) service providers.

The new GST policy will impact most of Bybit's offerings, including spot, margin, and derivatives trading, fiat currency transactions, and crypto withdrawals. For instance, selling 1 Bitcoin (BTC) for 100,000 Tether (USDT) will result in a net receipt of approximately 99,882 USDT after deducting fees and taxes. Additional taxable services include automatic repayment, liquidation under Unified Trading Accounts (UTA), and interest-bearing products. The GST will also apply to withdrawals, asset recovery, Bybit Pay, and over-the-counter (OTC) trading. Furthermore, taxes will be factored into order cost calculations, potentially increasing margin fees.

Simultaneously, Bybit will cease certain features and services. The platform plans to terminate its digital asset lending service, as well as trading bot functionalities such as spot grid, dollar-cost averaging (DCA), and futures combo strategies. Additionally, Bybit cardholders in India will face transaction restrictions starting November 17.

The introduction of an 18% GST further compounds the tax challenges already faced by Indian crypto investors. Currently, users are subject to a 30% capital gains tax on digital asset transfers and a 1% tax deducted at source (TDS). Industry experts have raised concerns that the increasing tax burden could stifle the growth and long-term adoption of the digital asset sector in India. "The additional taxes may deter participation and slow down the industry's overall expansion," noted one industry observer. This heightened tax environment could potentially discourage new investors and limit the growth potential of the cryptocurrency market in India.

Bybit's move to apply an 18% GST targets Indian users, affecting all platform transactions. The change applies to spot and margin trading, derivatives, staking, and more. Announcements were made via platform notifications, impacting 310,000 active users across India. The exchange's decision underscores India's evolving crypto tax policies. Market observers suggest it might drive users to less regulated exchange environments. Blockchain data is crucial for confirming any immediate shifts in user patterns or trading volumes.

The strategy reflects India's indirect tax policies, treating international exchanges like domestic providers. Bybit's GST introduction could lead to reduced trading volume, as users evaluate financially viable options under heightened tax pressures. Expert assessments on market dynamics remain speculative and warrant further analysis. The move parallels the Indian government's intense crypto tax regime with 30% profit tax and 1% TDS. Industry stakeholders highlight potential shifts due to increased trading costs, with BTC, ETH, and altcoins affected. Bybit has yet to comment on this major policy shift.