Bybit, a major cryptocurrency exchange, has declared that it will enforce an 18% Goods and Services Tax (GST) on all crypto-related fees for users based in India. This new policy starts from July 7, 2025, and reflects India’s strict approach to cryptocurrency regulation. The tax applies to several of Bybit’s core services, such as spot trading, margin trading, derivatives, fiat transactions, staking rewards, platform fees, and loan settlements. Bybit aims to align with India’s existing tax framework, which continues to evolve rapidly in the crypto space.
A Clear Shift Toward Regulatory Alignment
Bybit’s announcement directly follows India’s strategy of bringing virtual digital assets under clear tax laws. In 2022, the government imposed a 30% tax on crypto gains and added a 1% TDS on all transactions. Now, the introduction of an 18% GST on service fees further solidifies India’s regulatory grip on the digital asset market. Bybit’s decision doesn’t come as a surprise. The company understands that compliance holds the key to operating in India’s tightly monitored financial sector.
Ben Zhou, Bybit’s CEO, confirmed the move, stating that all trading and service fees charged to Indian users will now include GST. This enforcement spans the entire country, affecting every user interacting with the platform from Indian territory.
GST’s Reach: Every Service Now Carries a Tax Burden
The GST rule affects multiple areas of Bybit’s services. Traders using the spot market must now pay an extra 18% on transaction fees. For example, a ₹2,000 trading fee will now become ₹2,360. The same rule applies to derivatives and margin trading. Users engaging in high-volume strategies will feel the sting of this additional cost more sharply.
Staking programs and other “earn” opportunities won’t escape taxation either. If a user earns ₹5,000 in staking rewards, Bybit will deduct ₹900 as GST, leaving them with only ₹4,100. Even fiat deposits and withdrawals now fall under the new tax framework. The government will collect the tax directly from these transactions, reducing user profits and increasing overall trading costs.
Bybit also clarified that users can view the GST breakdown on their dashboards, offering transparency on every taxed service.
Over 310,000 Indian Users Face New Charges
Bybit has over 310,000 active Indian users. Every one of them now faces higher transaction costs. This massive shift could reduce activity levels, especially for users who rely on low-cost, high-frequency trading. In Q2 2025, Indian wallets on Bybit showed significant transaction volumes. With the new GST structure in place, these volumes may drop sharply. Traders who deal in small gains may reconsider their strategies, as their profit margins shrink under the new tax burden.
Shutdown of Legacy Services: A Dual Blow for Users
On top of the GST announcement, Bybit revealed that it will shut down several legacy services. Starting July 9, 2025, the platform will phase out crypto loans, automated trading bots, and the Bybit Card. Users must repay open loans by July 17. Bybit has urged users to withdraw balances or disable trading bots manually. The platform will automatically deactivate all Bybit Cards by July 17.
These closures add another layer of disruption for Indian users. Bybit’s loan service helped traders with short-term capital needs, while bots allowed round-the-clock automation. The Bybit Card offered a direct link between crypto holdings and real-world spending. Removing these features will limit flexibility and convenience for many users.
India’s Tax Strategy Pushes Exchanges to Adapt
The GST rule marks another step in India’s attempt to tame the crypto market. After imposing capital gains taxes and TDS in 2022, the government continues to tighten the noose around digital assets. The GST now adds a consumption-based tax layer, indicating that India views crypto not only as an asset class but also as a service industry that must pay its share.
Other exchanges operating in India may soon follow Bybit’s lead. If they don’t, they risk legal and operational trouble. This possibility could lead to industry-wide changes. As each platform starts taxing users, the entire Indian crypto space may experience slower growth. The higher cost of participation could push some users away altogether.
The Immediate Impact: Volume Drop and User Frustration
Traders and analysts predict a decline in Total Value Locked (TVL) and overall trade volume on Bybit. Many users view the GST as another hit to their already-taxed crypto gains. Community forums reflect growing dissatisfaction. Traders call the tax regime unfair, claiming that it stifles innovation and participation.
Some users might migrate to decentralized exchanges (DEXs) to avoid GST and similar fees. DEXs don’t charge centralized service fees, making them more attractive for cost-conscious traders. However, DEXs come with their own risks and technical challenges, especially for newer users.
Potential Shift to Non-Local Platforms
India’s aggressive tax approach could backfire if more users choose offshore platforms. Platforms that don’t enforce GST could become havens for Indian traders. While risky, this move could seem necessary for users who want to protect their profits.
Bybit’s decision may force users to reevaluate their compliance strategy. Traders must now balance profit margins with legal safety. Switching platforms might offer short-term financial relief but could expose them to legal consequences later. Still, some will likely take that risk.
Regulatory Outlook: What Comes Next?
India’s crypto laws continue to evolve. The GST rule on Bybit may only serve as the beginning. Policymakers could introduce more taxes, stricter KYC norms, or usage limitations. Alternatively, the government might soon roll out a licensing framework for exchanges, which would standardize compliance.
Analysts advise users to stay updated and maintain transparent records. With each new rule, the burden on crypto investors increases. Exchanges must step up their educational outreach and guide users through these changes.
Final Thoughts
Bybit’s decision to enforce an 18% GST on all crypto-related fees in India reshapes the trading landscape. This move aligns with India’s rigorous tax structure but poses serious challenges for users. From increased costs to the discontinuation of key services, traders now face a tighter and more expensive ecosystem.
Over 310,000 Indian users must adapt to these changes immediately. High-frequency traders will suffer the most, while casual users may retreat from active trading. Community reactions reflect growing dissatisfaction, and the industry might see a shift toward decentralized or offshore solutions.
As India builds its financial framework around crypto, compliance becomes unavoidable. Bybit has taken a bold step, and other platforms may soon follow. The future now hinges on how users respond, how the government refines its policies, and whether the market can strike a balance between regulation and innovation.
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