OIDAR Services and GST in India — Registration, Returns, and Compliance for Digital Service Providers

OIDAR Services and GST in India

Online Information and Database Access or Retrieval (OIDAR) services represent one of the most significant and rapidly growing categories of cross-border supply in India's GST framework. OIDAR services — streaming platforms, cloud computing, SaaS applications, online gaming, digital content downloads, and internet advertising — are defined under Section 2(17) of the IGST Act, 2017 by their defining characteristic: they are delivered over the internet or an electronic network in an essentially automated manner with minimal human intervention, and would be impossible to deliver without information technology.

The critical policy decision in India's GST law: when a foreign entity supplies OIDAR services directly to Indian individuals (B2C consumers who are not GST-registered), the foreign entity must register in India under Form GST REG-10 and pay 18% IGST on those B2C supplies — regardless of its turnover or physical presence in India. There is no threshold exemption for foreign OIDAR providers serving Indian B2C consumers.

N D Savla & Associates, Chartered Accountants based in Mumbai, assists both foreign OIDAR providers seeking Indian GST compliance and Indian technology companies with OIDAR-type services exporting to foreign customers — advising on zero-rated export treatment, LUT filing, and GSTR-1 export reporting.

What Are OIDAR Services? — Definition Under Section 2(17) of the IGST Act

Section 2(17) of the IGST Act, 2017 defines OIDAR services as services whose supply is mediated by information technology over the internet or an electronic network, and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology. The IGST Act specifically lists the following as OIDAR services:

• Advertising on the internet (display ads, search ads, programmatic advertising)
• Providing cloud services (Infrastructure as a Service, Platform as a Service, Software as a Service delivered via cloud)
• Provision of e-books, movies, music, software, and other intangibles through telecommunication networks or the internet
• Providing data or information, retrievable or otherwise, to any person in electronic form through a computer network
• Online supplies of digital content (movies, television shows, music, and the like)
• Digital data storage
• Online gaming

The Three Qualifying Characteristics of OIDAR

For a service to qualify as OIDAR, three characteristics must be simultaneously present:

• Delivered over the internet or an electronic network: the service must be transmitted digitally. Physical delivery is not OIDAR even if the content is digital.
• Essentially automated with minimal human intervention: the delivery of the service to each consumer must happen without significant real-time human involvement. This distinguishes OIDAR from professional services (consulting, tutoring) where human expertise is the core deliverable.
• Impossible to ensure without information technology: the service is inherently dependent on technology for its existence. A live lecture by a human teacher that happens to be transmitted over the internet still exists without the internet; but a streaming video or cloud storage service cannot.

OIDAR vs Non-OIDAR — The Classification Test in Practice

The Four GST Scenarios for OIDAR Services

Form GST REG-10 — Registration for Foreign OIDAR Providers

Form GST REG-10 is the dedicated GST registration form for foreign entities supplying OIDAR services to Indian B2C consumers. Key features of the REG-10 registration:

• No Indian address required: the foreign entity uses its home country business address for GST registration
• No Indian PAN required: the home country Tax Identification Number (TIN, EIN, or equivalent) is used in place of PAN
• No turnover threshold: foreign OIDAR providers must register regardless of the value of B2C supplies to India
• Authorised person: the foreign entity designates an authorised person for GST compliance (can be located outside India)
• Online process: the entire registration is completed on the GST portal at gst.gov.in

GSTR-5A — The Monthly Return for Foreign OIDAR Providers

GSTR-5A is the dedicated monthly GST return for foreign OIDAR providers registered under Form GST REG-10. It is due by the 20th of the following month and covers:

• Details of all B2C supplies made to Indian individuals (non-taxable online recipients) during the month
• State-wise summary of B2C supplies (for IGST apportionment to destination states)
• 18% IGST liability on the aggregate B2C supply value
• IGST payment through the electronic cash ledger on the GST portal

The Two-Evidence Rule — Determining Recipient Location

Under Rule 12(5) of the IGST Rules, 2017, a foreign OIDAR provider must determine whether a recipient is located in India using at least two of the following non-contradictory pieces of evidence:

• The billing address of the customer
• The Internet Protocol (IP) address of the device used by the customer
• The bank account used for payment (country of the bank)
• The country code of the SIM card used by the customer
• The location of the fixed land line used by the customer

If two pieces of evidence consistently point to India, the recipient is treated as an Indian consumer for OIDAR GST purposes. Contradictory evidence requires the foreign provider to use additional evidence to resolve the conflict.

Indian OIDAR Exporters — Zero-Rating, LUT, and ITC Refunds

For Indian technology companies and digital service providers exporting OIDAR services to foreign customers, the supply is zero-rated under Section 16 of the IGST Act — meaning 0% GST applies, provided:

• The supply qualifies as an export of services (place of supply is outside India; payment received in foreign exchange)
• The Indian provider has filed a Letter of Undertaking (LUT) in Form RFD-11 with the GST department for the relevant financial year
• The invoice is marked as "Supply under LUT — Export of Services; IGST: NIL (Zero-Rated)"

The ITC accumulated on business inputs (cloud servers, developer tools, internet services, software subscriptions) for which GST was paid but no output GST was charged (due to zero-rating) can be claimed as a refund under Section 54 of the CGST Act. For Indian SaaS and digital service exporters, ITC refunds can be substantial and are an important cash flow mechanism. See our GST Return Filing Services guide for e-invoicing requirements.

Why N D Savla & Associates for OIDAR GST Services?

• Foreign OIDAR Provider Indian GST Registration and GSTR-5A Filing: We handle the complete Indian GST registration and compliance for foreign OIDAR providers — Form GST REG-10 registration, monthly GSTR-5A filing by the 20th, IGST payment processing, and B2B vs B2C segmentation advisory.
• Indian OIDAR Exporters — LUT, Zero-Rating, and ITC Refunds: Annual LUT filing, zero-rated export reporting in GSTR-1, ITC refund applications, and income tax treatment of foreign exchange receipts — managed as an integrated package.
• SAC Code and GST Classification Advisory: We advise Indian and foreign technology companies on the correct SAC classification for their specific digital services, ensuring consistency with the IGST Act's OIDAR definition.
• Two-Evidence Rule Compliance: We advise on the data collection and verification system design for foreign OIDAR providers with large Indian B2C subscriber bases — what data to collect, how to handle contradictory evidence, and how to document for GST audit.

Frequently Asked Questions — OIDAR Services and GST in India