Bybit Implements 18% GST on Service and Trading Fees for Indian Users
Bybit, a popular cryptocurrency exchange, has announced that it will be applying an 18% Goods and Services Tax (GST) on service and trading fees for all Indian users starting July 7. This move is expected to further heighten the tax burden on crypto transactions in the country.
Effective immediately, Indian users of Bybit will see the 18% GST being deducted from their assets across various services offered by the exchange. This includes spot and margin trading, derivatives trading, fiat-related transactions such as purchasing crypto with bank cards, crypto withdrawals, staking, and transfers via Bybit Pay. The tax will be calculated based on fees or spreads, depending on the type of transaction, and will be reflected in users’ transaction histories.
Furthermore, Bybit will be discontinuing certain products for Indian customers starting July 9. This includes legacy crypto loans, which users must settle by July 17, after which auto repayment will be initiated 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 onwards, followed by deactivation. Various trading bots will also be terminated on July 9.
Impact of Increased Tax Burden on Indian Crypto Market
India already has a stringent crypto tax regime in place, with a 30% capital gains tax on profits and a 1% Tax Deducted at Source (TDS) on each transaction since 2022. Recently, the Income Tax Department has been cracking down on users for underreporting crypto income through its “NUDGE” compliance campaign, flagging taxpayers for discrepancies between their returns and exchange data. Additionally, current rules in India do not allow for offsetting crypto losses or deductions.
With the introduction of the 18% GST on service and trading fees by Bybit, the overall tax burden on crypto transactions in India is set to increase even further. This has raised concerns about its potential impact on market participation and user sentiment. It is estimated that over 310,000 active Indian users on Bybit will be affected by this new tax structure.
As the crypto landscape in India continues to evolve, users and market participants will need to navigate these tax regulations and adjustments to ensure compliance and make informed decisions regarding their crypto investments.