What is OIDAR Services?

The concept of Online Information Database Access and Retrieval services (OIDAR services under GST is borrowed from the earlier service tax regime. The OIDAR services are primarily those services that are provided through the medium of internet and received by the recipient online without any physical interaction with the supplier of such services. In the growing world of internet, the popular online activities that comes under the ambit of OIDAR services are online gaming, provision of e-books, music, advertisement on internet, online supplies of digital content etc.

Treatment of OIDAR services under GST

• As OIDAR services are delivered through internet, they can be provided from any place across the world. For supplies to be taxed under GST provisions, the place of supply with regards to the subject supply should be India. In situations where the OIDAR Service supplier and the recipient of the service, both are in India, the location of the service recipient would be considered as the place of supply, i.e., within India.
• Accordingly, OIDAR services under GST are taxable in India and supplier of services is required to deposit the applicable GST on the online services provided.
• For situations where , the supplier of service is located outside India and “non-taxable online service recipient” is located India (not registered under GST), the place of supply would still be India.  In this case, overseas service provider providing OIDAR services to the unregistered service recipient in India would be required to deposit the applicable GST in India on such services.

 Non-Taxable Online Service Recipient for OIDAR services in GST

Non-taxable online recipient means “any government, local authority, governmental authority, an individual or any other person not registered under GST, who receive OIDAR services in relation to any purpose other than commerce, industry or any other business or profession located in India”

Thus, non-taxable online service recipients are those persons who are not registered under GST and receive service for non-business purpose. The tax applicable on such services is called Integrated GST (IGST).

How to determine service is being provided in India

• In case where any two of the non-contradictory conditions are achieved, OIDAR services in GSTto be treated as provided in India  Location of address presented by the online recipient is in India;
• “The card used for payment i.e., Debit card, Credit card or any other payment card has been issued in India”
• Recipient billing address belongs to India;
• The internet protocol address of the device used by the recipient of services belongs to India;
• Recipient of services uses a bank account located in India, for making payment for services
• The country code of the subscriber identity module card used by the recipient of services is of India;
• The fixed land line used to access and receive services by the recipient is located in India

How to comply with provisions of OIDAR services under GST, if supplier is located outside India?

• The supplier of OIDAR services for payment of IGST, is required to obtain a registration under the Simplified Registration Scheme by filling and submitting a form called ‘GST REG-10’.
• If there is a person located in India represent the overseas supplier for any purpose, then such person(being representative of the overseas supplier of services in India) can obtain OIDAR registration under GST to deposit IGST on behalf of the supplier of OIDAR services. .
• In case the overseas supplier does not have a physical presence or does not have a representative for any purpose in India, he may appoint an agent/ representative in India for the purpose of paying the applicable IGST.
• Agent/ representative in India undertakes all compliances in respect of depositing GST and filing GST returns in India on behalf of the provider of OIDAR services from outside India.

Services provided by Reina Legal LLP to overseas OIDAR service providers

• Acting as an agent in India for the limited purpose of undertaking GST compliances and providing official correspondence address in India for GST purposes
• Providing assistance in obtaining OIDAR registration under GST on behalf of overseas entities providing OIDAR services
• Computing and depositing the GST liability on a periodic basis
• Acting as an authorized signatory for signing and submitting GST returns on the Government’s portal