OIDAR Services

OIDAR Services Under GST: Complete 2026 Compliance Guide

A foreign digital service provider — whether streaming, SaaS, cloud, or gaming — that has even one paying individual customer in India owes GST on that transaction, regardless of global turnover. That is the core OIDAR rule. Under Section 24(xi) of the CGST Act, non-resident Online Information Database Access and Retrieval (OIDAR) suppliers must register via Form GST REG-10 and file monthly GSTR-5A returns. There is no threshold exemption. This guide covers the full definition, registration mechanics, B2B vs B2C treatment, return filing obligations, a worked Rs. example, and the edge cases most likely to generate a departmental notice in FY 2026-27.

What Qualifies as an OIDAR Service Under GST

Section 2(17) of the IGST Act 2017 defines OIDAR as services that are:

• delivered via information technology over the internet or an electronic network
• essentially automated, with minimal human intervention
• impossible to deliver without information technology

The Finance Act 2023 deliberately softened the "essentially automated" and "minimal human intervention" tests. Before 2023, any meaningful human element in the delivery risked pushing a service outside OIDAR. Post-2023, the controlling question is whether information technology is the primary delivery mechanism — not whether it is the exclusive one. This expansion brought several previously borderline services squarely into scope.

Services that qualify

• Streaming subscriptions: OTT video, music platforms, podcast subscriptions, digital newspapers and magazines
• Cloud and hosting: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), cloud storage, web hosting, domain registration
• SaaS: subscription software delivered entirely online — CRM, accounting, collaboration, payroll, and HR tools
• Digital content downloads: apps, e-books, ringtones, films, software licences, fonts, templates, stock images
• Online advertising: programmatic ad inventory, ad exchange intermediary services, retargeting platforms
• Online gaming: casual gaming platforms and real-money gaming (with distinct rate treatment — see edge cases below)
• Automated online courses: pre-recorded video courses, LMS-driven programmes with automated grading and digital certificates
• Online portals: job boards, matrimonial sites, dating apps, automated comparison platforms, online auction sites
• In-app purchases and digital gifts: in-app currency, virtual goods, super-chats on live-streaming platforms, digital tipping

Services that do not qualify

• Live online classes with substantive real-time instructor interaction — the medium is electronic, but human expertise is the core of the supply
• Professional advisory conducted online: an online CA consultation, a video call with a lawyer — these are professional services, not OIDAR
• Telecommunications services: these have a separate GST treatment under the IGST Act
• Online marketplaces for physical goods: the marketplace platform may be OIDAR, but the underlying goods transaction is not

Getting this classification right matters because it determines who pays, at what rate, and in which return. Misclassifying a professional service as OIDAR — or vice versa — creates either an under-payment or an incorrect return type, both of which are audit risks.

Who Must Register — The Section 24(xi) Compulsion

Section 24(xi) of the CGST Act mandates registration for every person supplying OIDAR services from outside India to a non-taxable online recipient in India, without any turnover threshold.

A non-taxable online recipient is defined in Section 2(16) of the IGST Act as an unregistered person receiving OIDAR services for non-commercial purposes — practically, any individual consumer or unregistered entity in India.

The no-threshold rule is absolute. If you are a US-based SaaS startup generating ₹4,00,000 per year from 30 Indian individual subscribers, you are liable to register and remit 18% IGST on every rupee. The ₹20 lakh annual threshold that applies to Indian domestic providers does not exist for foreign OIDAR suppliers.

What actually triggers the obligation

Your OIDAR GST obligation in India arises the moment three conditions are simultaneously true:

1. Your service falls within the OIDAR definition
2. The place of supply is India (the recipient is located in India)
3. At least one Indian customer is an unregistered individual or entity

If all your Indian customers are GST-registered businesses who provide their GSTIN at checkout, you have no OIDAR registration requirement — they pay under Reverse Charge Mechanism. The moment a single B2C customer exists, registration under Section 24(xi) is compulsory.

How to Register: Form GST REG-10, Step by Step

Form GST REG-10 is the dedicated form for non-resident OIDAR providers. It is distinct from Form REG-09, which applies to regular non-resident taxable persons importing goods or physical services into India. Do not conflate the two.

Before you begin: what you need

• An Authorised Representative in India — mandatory if the foreign entity has no fixed Indian establishment. This can be a CA firm, a law firm, or any individual with a valid PAN and Aadhaar. The representative signs and files on the foreign entity's behalf.
• Documents to gather:
• Proof of incorporation or registration of the foreign entity (apostilled or notarised as applicable)
• Identity and address proof of the authorised representative
• Bank account details — a foreign bank account is accepted for OIDAR registration (unlike REG-09, which requires an Indian bank account)
• Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) of the authorised representative

The application process

1. Go to gst.gov.in → Services → Registration → New Registration
2. Under Taxpayer Type, select Non-Resident Online Services Provider
3. Fill in Form REG-10 with: legal name of the overseas entity, country of incorporation, principal place of business address, authorised representative's PAN, email, and mobile number, bank account and SWIFT code, and a brief description of OIDAR services supplied
4. Upload supporting documents
5. Submit using the authorised representative's DSC or EVC

After submission

A GST officer reviews the application. There is no advance tax deposit required — this is a key procedural difference from REG-09. On approval, you receive:

• Form GST REG-06 — the Registration Certificate
• A GSTIN beginning with `9999` — a national identifier indicating non-resident OIDAR status, not tied to any specific state

Since OIDAR supplies are treated as interstate supplies, IGST is the only applicable tax — no CGST and SGST split. This simplifies your accounting considerably.

B2B vs B2C: Who Pays GST and How

The OIDAR framework creates a clean fork based on the Indian customer's registration status.

B2C OIDAR — foreign supplier pays

Where the Indian recipient is an individual or an unregistered entity:

• The foreign supplier charges and remits 18% IGST on forward charge
• The supplier reports these supplies in GSTR-5A
• There is no ITC available to the consumer (individuals cannot claim ITC)
• The foreign supplier should show the GST component or GST-inclusive pricing on invoices or receipts

B2B OIDAR — Indian recipient pays under RCM

Where the Indian recipient is a GST-registered business:

• The Indian recipient self-assesses and pays 18% IGST under Reverse Charge Mechanism (RCM)
• The foreign supplier has no GST obligation for this specific transaction
• The Indian recipient reports the RCM liability in GSTR-3B (Table 3.1(d)) and pays via the electronic cash ledger
• The Indian recipient can claim ITC on the RCM IGST paid, subject to normal ITC conditions (the service must be used for business, not blocked under Section 17(5))

How to classify at checkout — practical design

Your platform checkout or subscription sign-up must capture the customer's GSTIN. Best practice:

• Make the GSTIN field prominent and explicitly labelled, not buried in optional fields
• Integrate the GST portal's GSTIN validation API for real-time verification — a malformed or cancelled GSTIN should trigger a customer alert
• Store the GSTIN response (including "not registered" responses) permanently against the transaction ID
• Re-validate GSTINs at each renewal — a GSTIN valid in April 2026 may be cancelled by October 2026

In a CBIC audit, the classification burden falls on the supplier. A screenshot of your checkout flow is not sufficient documentation; transaction-level records showing the GSTIN provided (or not provided) per invoice are what you need.

GSTR-5A: What, When, and How to File

GSTR-5A is the complete GST compliance return for non-resident OIDAR providers. There is no GSTR-1, no GSTR-3B, and no annual GSTR-9 for entities registered exclusively as non-resident OIDAR providers.

What GSTR-5A contains

• Table 3: Aggregate value of outward supplies made to non-taxable online recipients during the month, IGST applicable, and any amendments to previous returns
• Table 4: Amendments to supplies reported in earlier GSTR-5A returns
• Table 5: Tax already deposited

Each month's return is self-contained. If you make an error in a prior month, correct it in Table 4 of the current return — there is no separate amendment return.

Currency conversion: the practical step

If you invoice in USD, EUR, or GBP, convert each invoice to INR using the RBI Reference Rate published at rbi.org.in on the date the supply is made (typically the subscription activation or renewal date). Maintain a month-wise spreadsheet with: invoice date, invoice amount in foreign currency, RBI reference rate on that date, and INR equivalent. This is what a CBIC officer will ask for in a scrutiny proceeding.

Worked Example: A Foreign SaaS Company's OIDAR Liability in FY 2026-27

Facts: TechCore GmbH, a Berlin-based project management SaaS company, has the following Indian customer base in April 2026:

• 1,200 individual B2C subscribers at ₹1,499/month
• 18 GST-registered Indian businesses (B2B) at ₹7,500/month per licence

Step 1 — Compute B2C taxable value

B2C monthly revenue = 1,200 × ₹1,499 = ₹17,98,800

Step 2 — Compute IGST liability

IGST at 18% = ₹17,98,800 × 18% = ₹3,23,784

TechCore must pay ₹3,23,784 to the Indian exchequer and file GSTR-5A by 20 May 2026 for April 2026 supplies.

Step 3 — B2B: TechCore has zero liability

The 18 Indian registered companies pay RCM individually:

• Monthly RCM base = 18 × ₹7,500 = ₹1,35,000
• IGST under RCM = ₹1,35,000 × 18% = ₹24,300
• Each Indian company reports this in its own GSTR-3B and is eligible to claim ITC of ₹24,300

Step 4 — Annual picture for TechCore

Assuming a stable subscriber base: Annual B2C IGST liability = ₹3,23,784 × 12 = ₹38,85,408

Step 5 — The cost of a missed deadline

If TechCore misses the 20 May 2026 deadline and files on 25 June 2026, the delay is 36 days.

• Late fee = 36 × ₹200 = ₹7,200
• Interest at 18% p.a. on ₹3,23,784 for 36 days = ₹3,23,784 × 18% ÷ 365 × 36 = approximately ₹5,754
• Total cost of delay: ₹12,954 — avoidable with a calendar alert

Indian OIDAR Providers: Obligations and Key Differences

An Indian company supplying OIDAR services — a domestic OTT platform, an Indian LMS, or a local SaaS product — is not subject to the non-resident OIDAR rules at all. For Indian providers:

• Regular GST registration applies with the ₹20 lakh threshold (₹10 lakh for Special Category States)
• GSTR-1 and GSTR-3B are the applicable returns — not GSTR-5A
• 18% GST on domestic B2C and B2B supplies on forward charge
• Zero-rated exports of OIDAR services to overseas recipients, contingent on receipt of foreign exchange in convertible currency and compliance with FEMA

Indian OIDAR exporters should choose between exporting under a Letter of Undertaking (LUT) — no upfront GST payment, with accumulated ITC claimed as a refund — or under bond with integrated tax payment followed by refund. For most SaaS and digital content exporters, the LUT route is operationally simpler and avoids blocking working capital.

Section 194-O TDS for Indian platform operators

If your Indian entity operates a platform that facilitates digital supplies by third-party sellers to consumers, you may need to deduct TDS at 1% under Section 194-O of the Income-tax Act 1961 on gross payments credited to those sellers. This obligation applies to e-commerce operators — a classification that overlaps with, but is distinct from, OIDAR self-suppliers. Platforms with marketplace features alongside their own OIDAR supply should map each revenue stream to its correct legal treatment.

Edge Cases Worth Getting Right in 2026

Online gaming: the 28% carve-out from October 2023

From 1 October 2023, online money gaming — covering games of chance and real-money skill gaming with deposits — is taxed at 28% on the full face value of the bet, deposit, or buy-in, not 18% on the platform fee. This is a dedicated GST regime, legislated separately from standard OIDAR.

Skill-based casual gaming with no money at stake continues at 18% as a standard OIDAR service.

If your platform offers both real-money and free-to-play games, you must segregate revenue streams by mode with precision. Applying 18% to what should attract 28% is a retrospective liability issue — the CBIC is actively auditing gaming platforms for FY 2023-24 and FY 2024-25, and assessments are being issued.

Online education: the automated vs live distinction

Fully automated online courses — pre-recorded video, LMS delivery, automated assessments, digital certificates — qualify as OIDAR at 18%. Live webinars and online classes with a real instructor interacting in real time are educational services (HSN 9992) and subject to different rate notifications.

The practical test: could this course run identically without a human present on the day of delivery? If the answer is yes, it is OIDAR. If real-time human expertise is what the customer is paying for, it is not.

Digital subscriptions bundled with physical delivery

Some news or magazine subscriptions include an optional print edition. The print component is a separate supply of goods; only the digital access qualifies as OIDAR. Apply a reasonable apportionment between the digital and physical components, document your methodology clearly, and apply GST on each component at the correct rate.

API-as-a-Service and data licensing

Financial market data APIs, geolocation APIs, weather data feeds, and similar machine-to-machine data services are squarely OIDAR. There is no human at the delivery end and the supply is entirely automated. These are increasingly common in Indian fintech and logistics stacks — Indian companies subscribing to foreign data APIs pay RCM on each periodic fee.

Common Mistakes — and How to Fix Them

Assuming the ₹20 lakh threshold applies to foreign providers. It does not. Registration under Section 24(xi) is mandatory from the first rupee of B2C Indian revenue. Fix: Register via REG-10 before your first Indian consumer subscribes.

Not collecting GSTIN at checkout. Without a GSTIN, every Indian customer defaults to B2C and you are liable for IGST on all of them. Fix: Build GSTIN collection into the onboarding flow as a labelled, mandatory field for business customers, with real-time validation against the GST portal.

Filing GSTR-5A in a foreign currency. The return requires INR values only. A foreign-currency filing gets rejected or produces incorrect tax computation. Fix: Maintain a daily RBI reference rate log and convert each invoice to INR at the rate on the date of supply.

Confusing GSTR-5 with GSTR-5A. GSTR-5 is for non-resident taxable persons physically operating in India for a short period. GSTR-5A is exclusively for non-resident OIDAR providers. Filing the wrong return leaves your OIDAR supplies unreported. Fix: Confirm your registration type in your REG-06 certificate and verify the return type displayed in your GST portal profile.

Using stale GSTINs for B2B classification. A GSTIN valid at sign-up may be cancelled six months later. If you rely on a cancelled GSTIN to classify a transaction as B2B, the transaction defaults to B2C — and you are liable for IGST that was never collected. Fix: Re-validate all registered customer GSTINs at each subscription renewal.

Destroying records earlier than required. The GST Act requires records for 6 years from the due date of the annual return for the relevant year. Many foreign companies run shorter corporate data-retention cycles. Fix: Update your global data-retention policy to reflect the Indian statutory minimum, specifically tagging Indian OIDAR transaction records.

Treating OIDAR registration as covering all Indian GST exposure. A non-resident OIDAR GSTIN covers only OIDAR B2C supplies. If the same foreign company has a liaison office, a dependent agent, or is otherwise found to have a Permanent Establishment (PE) in India, a separate GST registration under normal provisions may be required — these are independent obligations.

Key Takeaways

• OIDAR covers all substantially automated digital services delivered over the internet — streaming, SaaS, cloud, downloads, automated education, online gaming, and data APIs — where information technology is the primary delivery vehicle.
• Foreign OIDAR suppliers must register via Form GST REG-10 under Section 24(xi) of the CGST Act from the first B2C Indian customer; the domestic ₹20 lakh threshold does not apply.
• B2C = 18% IGST paid by the foreign supplier on forward charge; B2B = 18% IGST paid by the Indian registered recipient under RCM. The classification depends entirely on whether the customer presents a valid, current GSTIN.
• GSTR-5A is due by the 20th of every following month, filed in INR at the RBI reference rate on the date of supply; it is the only return obligation for non-resident OIDAR registrants.
• Late filing attracts ₹200 per day plus 18% per annum interest on unpaid IGST — small delays on large subscriber bases accumulate into significant amounts quickly.
• Online money gaming is not standard OIDAR — it attracts 28% GST on the full deposit or bet face value under a separate regime effective October 2023; casual free-to-play gaming remains at 18%.
• The CBIC is actively monitoring non-compliant foreign digital providers in FY 2026-27 — retrospective demands with compounded interest and late fees are being issued to global streaming, SaaS, and advertising platforms that deferred registration.