India Imposes 18% GST on Crypto Services, Tripling Tax Burden

India has introduced a new 18% Goods and Services Tax (GST) on all crypto-related services for Indian users, effective from July 7, 2025. This tax will be applied to a wide range of services on the Bybit platform, including spot and futures trading, copy and bot trading, staking rewards, withdrawals, card payments, token swaps, yield earnings, and deposits via card or bank. Additionally, crypto loans and the Bybit Card will be discontinued for Indian users.

This new tax adds to the existing 30% tax on crypto profits and 1% Tax Deducted at Source (TDS) on every sell transaction, creating a "triple tax trap" for Indian crypto traders. The cumulative taxation may push users towards decentralized finance (DeFi) or peer-to-peer (P2P) platforms, where privacy is higher and users can avoid TDS on centralized exchanges (CEXs). However, tax compliance on these platforms becomes more complex, although possibly less immediate.

While the new tax may offer temporary relief by encouraging a shift to DeFi, long-term change can only come from balanced regulation that supports innovation without stifling users. India's crypto ecosystem urgently needs a fair and innovation-friendly tax framework. Over-taxing could drive users underground and slow the sector's growth. As of July 7, India's crypto tax burden becomes heavier than ever, potentially stifling innovation and growth in the crypto sector.