Bybit Introduces 18% GST on Trading Fees for Indian Users, Heightening Tax Burden

As of July 7, Bybit has implemented an 18% Goods and Services Tax (GST) on all service and trading fees for users in India, as confirmed in an announcement made on July 4. This measure marks a significant addition to the already substantial tax obligations faced by cryptocurrency traders in the country.

Details of the GST Implementation

The newly introduced GST will be automatically deducted from users’ assets across various services offered by Bybit. These include spot and margin trading, derivatives trading, fiat-to-crypto purchases via bank cards, and crypto withdrawals, which also cover the recovery of incorrect deposits. Fees incurred through staking and transfers via Bybit Pay will also be subject to the tax. The GST will be calculated on the basis of applicable fees or spreads, depending on the nature of each transaction, and users will be able to view the tax details in their transaction histories.

Product Discontinuation for Indian Users

In conjunction with the GST rollout, Bybit is set to phase out several services for Indian users starting July 9. Notably, legacy crypto loans will no longer be available, and users will be required to settle these loans by July 17; thereafter, any outstanding balances will be repaid automatically. Additionally, applications for the Bybit Card will cease, and currently active cards will be disabled from making new transactions from July 17, ultimately leading to their deactivation. Furthermore, various trading bots will also be terminated on July 9.

Existing Crypto Tax Landscape in India

India’s regulatory framework for cryptocurrency has been notably stringent. Since 2022, users have been subject to a 30% capital gains tax on profits and a 1% Tax Deducted at Source (TDS) on each transaction. The Income Tax Department has intensified its scrutiny of crypto transactions, particularly targeting underreporting through its “NUDGE” compliance initiative. Numerous users have been contacted due to discrepancies between their tax returns and data sourced from cryptocurrency exchanges. Under the prevailing regulations, crypto losses cannot be offset against other income, and no deductions are permitted.

Implications of Increased Taxation

The addition of an 18% GST further amplifies the existing tax burden on cryptocurrency transactions in India, which raises significant concerns regarding its impact on market participation and overall user sentiment. With over 310,000 active Bybit users in India potentially affected by the new tax structure, this development may discourage trading activity and dampen interest in the cryptocurrency ecosystem.