OIDAR Services under GST
OIDAR Services under GST
OIDAR Services or Online Information and Database Access or Retrieval (OIDAR) Services are services whose delivery is made through information technology over internet or electronic network and the supply is automated with minimal human intervention. With the tremendous growth in cloud technology and SAAS based products in India over the last decade, more and more services are being introduced by Indian and Non-Resident Taxable Persons, which would fall under the classification of OIDAR services. In this article, we look at OIDAR services and its impact under GST.
What are OIDAR Services?
OIDAR Services has been defined in the IGST Act as services whose delivery 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. Some examples of OIDAR services include:
- Online advertising service providers
- Cloud service providers
- Providing e-book, movie, music, software and other intangibles via telecommunication networks or the internet
- Providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network
- Digital data storage services
- Online gaming services
- Online supplies of digital content like movies, television shows, music, etc.
GST Registration for OIDAR Service Providers
Any entity providing OIDAR services is required to mandatorily obtain GST registration in India, irrespective of the aggregate turnover criteria. The following types of taxable person are required to obtain GST Registration mandatorily and OIDAR service providers is one of them:
- Persons making any inter-State taxable supply;
- Casual taxable persons;
- Persons who are required to pay tax under reverse charge;
- Electronic commerce operators;
- Non-resident taxable persons;
- Persons who are required to deduct tax;
- Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;
- Input service distributor (whether or not separately registered under the Act)
- Persons who are required to collect tax;
- Electronic commerce operator
- Every person supplying online information and data base retrieval services from a place outside India to a person in India, other than a registered person;
Hence, most OIDAR service providers even outside India providing services to residents in India would be required to mandatorily obtain GST registration by virtue of being classified under one or more of the above categories.
GST Registration for OIDAR Service Providers – Located in India
OIDAR service providers with a place of business in India can obtain GST Registration through the normal method by applying as through the GST common portal. (Know more about obtaining GST registration in India.)
GST Registration for OIDAR Service Providers – Located Outside India
All OIDAR service providers supplying services to residents in India and not located in India are also required to comply with GST regulations. Any OIDAR service provider supplying online information and data base access or retrieval services from a place outside India to a non-taxable online recipient is required to obtain GST registration by filing GST REG-10.GST Registration Application - OIDAR Service Provider
The application for GST Registration for OIDAR service providers can be submitted electronically with a self-attested copy of valid passport of the promoters and tax identification number or unique identification number issued by the foreign Government or PAN. The application for GST registration must be submitted atleast 5 days prior to the commencement of business in India.
Foreign companies can appoint a representative in India for obtaining GST registration, filing GST returns and paying GST payments on behalf of the foreign entity.
GST Filing for OIDAR Service Providers
Based on the place of business of the OIDAR service provider, the due date for GST Return Filing and the form to be filed would vary.
For OIDAR Service Providers Located in India
OIDAR service providers located in India would have to file GSTR-1, GSTR-2, GSTR-3 and annual GST return like a regular taxpayer. (Know the GST return due dates)
For OIDAR Service Providers Located Outside India
OIDAR service providers located outside India are required to file Form GSTR-5A on or before the 20th of each month. Similar to the requirement for registration, all OIDAR service providers located outside India are required to appoint a representative in India for filing of GST returns and ensuring compliance under GST.
Form GSTR-5A is a simplified form and the details to be provided in Form GSTR-5A include:
- Details of taxable outward supplies made to consumers in India with details like place of supply (State/UT), rate of tax, taxable value, IGST and Cess.
- Calculation of interest, penalty or any other amount
- Tax, interest, late fee and any other amount payable and paid
Reverse Charge for OIDAR Services
Under GST, the supplier of goods and services is normally made liable for the collection and payment of IGST or CGST and SGST to the Government. However, OIDAR services has been placed under the list of Reverse Charge Services under GST, making the recipient of the service liable for payment of GST. Hence, all business entities receiving OIDAR services in India are required to pay GST on behalf of the supplier.