OIDAR services under GST regime? OIDAR stands for Online Information Database Access and Retrieval services. In other words, OIDAR refers to the services are provided through the means of the internet.
For a service to be qualified as OIDAR, it must fulfill the following two conditions:
- Delivery is performed through the internet
- It is an automated supply with minimal human intervention and information technology is essential to it
Some of the examples of OIDAR services include cloud services, internet advertising, online gaming, digital content (e-books, movies, music, data, etc.), and services involving the supply of data/information via the internet.
Supplies of physical goods or services through electronic means, email consulting, educational courses, and any physical supply is not covered in OIDAR scope.
Recommended: GST on Affiliate Marketers, Bloggers, YouTubers & Freelancers
GST Applicability for OIDAR Services
Depending on the location of the supplier and recipient, OIDAR services under GST may or may not be liable, as follows:
Case 1: Both Supplier and Recipient are in India
GST applicable – Yes
GST is to be paid on Forward charge basis
Case 2: Supplier resides out of India, and Recipient is in India and GST Registered
GST applicable – Yes
GST is to be paid on Reverse charge basis
Case 3: Supplier lives out of India, and Recipient is in India but not Registered for GST
GST applicable – Yes
GST is to be paid on Forward charge basis
When OIDAR services are imported by an unregistered, non-taxable person in India, tax (GST) on such services will be paid by the supplier located outside India on Forward charge basis.
Case 4: Supplier is in India, but the Recipient is outside India
GST applicable – No (Export service)
Case 5: Both Supplier and Recipient are outside India
GST applicable – No (Out of GST scope)
Do services provider located outside India need to register under GST?
If a service provider located outside India is providing OIDAR services to an unregistered, non-taxable person in India, then the supplier has to take a single registration under the Simplified Registration Scheme of GST. However, if the services are provided to a registered person/company in India, then the supplier outside India do not need to register or pay GST.
A registered person in India receiving OIDAR services from a company located outside India must pay IGST directly to the government on reverse charge basis.
Place of supply in case of OIDAR services under GST will be the location of the recipient of services.
To conclude,
- If an OIDAR service under GST, is provided by a company in India to another person/company in India, GST will be paid on forward charge basis.
- If an OIDAR service is provided by a company outside India to a GST-registered person/company in India, GST will be paid by the recipient on reverse charge basis.
- Export of OIDAR services outside India is not taxable under GST.
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