GST on OIDAR

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Added Value Tax on OIDAR Services

What is OIDAR:

OIDAR is “Online Information Database Access and Retrieval” services (henceforth referred to as OIDAR) are a category of services delivered via the internet and received by the recipient online without a physical interface with the service provider. as an example, a consumer who downloads an e-book for a fee would be considered to possess received OIDAR services.

The IGST Act defines OIDAR as services which’s delivery is mediated through information generation over the net or a digital network, and whose nature renders their supply basically automatic, requiring minimum human intervention, and not possible to make sure inside the absence of statistics generation. This definition includes electronic services such as:

Internet-based advertising
The provision of e-books, movies, music, and other intangibles via telecommunication networks or the internet;
Providing retrievable or non-retrievable data or information to a person via a computer network;
Providing retrievable or non-retrievable data or information to a person via a computer network;
Digital data storage;
Online gaming;

Indicative List of OIDAR Services:

1. Website supply, web hosting, remote program and equipment maintenance:

Hosting websites and web pages;
Automated, online, and remote program maintenance;
Remote administration of systems;
Online data warehousing where specific data is electronically stored and retrieved;
online supply of disk space on demand
Online gaming;

2. The provision of software and its update:

Accessing or downloading software updates (including procurement/accounting programs and anti-virus software);
Banner blockers are software wont to prevent banner advertisements from displaying.
Download drivers, like software that serves as an interface between computers and peripheral devices (such as printers);
Automated online installation of website filters;
Automated online installation of firewalls.
Online gaming;

3. Providing images, text, and data and making databases accessible:

Gaining access to or downloading desktop themes
Gaining access to or downloading photographic or illustrative images or screensavers;
The content of books and other electronic publications that has been digitized;
Online subscriptions to newspapers and journals;
Weblogs and site analytics;
Online news, traffic updates, and weather forecasts;
Online information generated automatically by software supported the customer's input of specific data, like legal and financial data (in particular, real-time stock exchange data);
The provision of advertising space on a website, including banner ads;
Utilization of search engines and online directories.

4. Supply of music, games, and films, including games of chance and gambling games, also as broadcasts of artistic, cultural, political, sporting, scientific, and entertainment events:

Downloading or accessing music on computers and mobile devices;
Gaining access to or downloading jingles, excerpts, ringtones, and other sounds;
Gaining access to or downloading films;
Downloading games to non-public computers and mobile devices;
Accessing automated online games hooked in to the Internet or comparable electronic networks, where players are geographically separated.

5. Provision of distance education:

Automated distance teaching hooked in to the Internet or a comparable electronic network to work and the supply of which needs limited or no human intervention, including virtual classrooms, except where the web or a comparable electronic network is used simply as a tool for communication between the teacher and student;
Online workbooks completed by students and automatically graded without human intervention.

OIDAR Service Test:

The inclusive portion of the OIDAR service definition is simply indicative and is not exhaustive. the subsequent test can be used to determine whether a specific service is an OIDAR service.

Service	Whether Provision of service mediated by information technology over the internet or an electronic network	Whether it is Automated and impossible to ensure in the absence of information technology	OIDAR Service
Pdf document manually emailed by provider	Yes	No	No
Pdf document automatically emailed by provider’s system	Yes	Yes	Yes
Pdf document automatically downloaded from site	Yes	Yes	Yes
Stock photographs available for automatic download	Yes	Yes	Yes
Online course consisting of pre-recorded videos and downloadable pdfs	Yes	Yes	Yes
Online course consisting of pre-recorded videos and downloadable pdfs plus support from a live tutor	Yes	No	No
Individually commissioned content sent in digital form Ex: photographs, reports, medical results	Yes	No	No

Registration of OIDAR:

For the payment of integrated tax, the provider (or intermediary) of online information and database access or retrieval services must obtain one registration under the Simplified Registration Scheme on Form GST REG-10. In such instances, the supplier must register with the Principal Commissioner of Central Tax, Bengaluru West, who has been designated to grant registration.

If there’s a representative in the taxable territory (India) for an overseas supplier, that representative must register and pay the integrated tax on the supplier’s behalf.

If the overseas supplier doesn’t have a physical presence or a representative in the taxable territory for any reason, he may appoint an individual in the taxable territory for the purpose of paying integrated tax, which person will be responsible for the payment of such tax.

Who may be a Non-Taxable Online Recipient:

A “non-taxable online recipient” is any government, agency, governmental authority, individual, or other non-registered person located in the taxable territory who receives online information and database access or retrieval services for a purpose aside from commerce, industry, or other business or profession.

Who will pay GST:

In cases where the supplier of a service is found outside of India and the receiver is a business entity (registered entity) located in India, the reverse charge mechanism is going to be triggered, and therefore the receiver in India who is a registered entity with GST will be liable to pay GST under reverse charge and comply with all applicable regulations.

The supplier of services located in a non-taxable territory is responsible for paying integrated tax on the supply of online information and database access or retrieval services received by a non-taxable online recipient.

If an intermediary located outside of India arranges or facilitates the availability of such a service to a non-taxable online receiver in India, the intermediary is taken into account to be the supplier of such a service, unless the intermediary meets the subsequent conditions:

The invoice, customer bill, or receipt issued or made available by the intermediary clearly identifies the service in question and its supplier in non-taxable territory.
The intermediary involved within the supply neither authorizes nor participates in the customer's charge, meaning that the intermediary neither collects nor processes payment neither is responsible for the payment between the nontaxable online recipient and the service provider.
The intermediary within the supply chain does not authorize shipment; and
The general terms & conditions of the supply are determined not by the intermediary but by the service provider.

Returns on GST Paid by OIDAR:

According to rule e 64 of the CGST Rules, 2017, every registered one that provides online information & database access or retrieval services from abroad to a person in India who is not a registered person shall file a return in FORM GSTR-5A on or before the 20th day of the month of the next the calendar month or part of the month.

Only the service provider (or his representative) providing OIDAR services from outside India to a non-taxable online recipient in India is required to file Form GSTR-5A. Other categories of OIDAR service providers (such as those providing OIDAR services from India) are going to be required to file the standard returns (GSTR-1 & GSTR-3B) for registered persons.

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