OIDAR Services in GST- Concept and its Applicability

OIDAR services refer to Online Information and Database Access or Retrieval services. These are the type of services that are related to the delivery made via the internet or electronic network with automated supply and minimum human interaction. As the decade passed by, we have seen immense growth in cloud technology and SQL Server Analysis Services (SSAS) based products which lead us to here today where Indian and Non-Resident Taxable persons are introducing more & more services that would be classified as OIDAR Services. Procedures for filing and registering for GST for OIDAR services. The Indian GST laws must also be followed by foreign OIDAR service providers.

What are OIDAR Services?

As per the IGST Act, OIDAR Services are the services provided via the medium of the internet through information technology or electronic network under which the supply is rendered automated and there is minimum interaction.

The following are some examples of OIDAR Services:

✅  Advertising Services Online

✅  Cloud Services

✅  Delivering e-books, movies, music, soft-wares, or other non-physical products through the means of the internet

✅  Gaming Services Provided Online

✅  Digital Content Being Provided online mainly movies, TV Shows, Music, etc.

✅   Services provided for the Storage of Digital Data

Note: It is to clarify that the services for which communication is being made via the internet or services are being facilitated through its medium doesn’t always mean it would be categorized as OIDAR Services.

Some of the non-OIDAR Services to be classified as:

✅  Where the order and processing are made via electronic basis for a supply of good

✅   Supply of newspapers, books in physical form, newsletters, or journals

✅   Services gave by consultants advising their clients or keeping up with them through emails

✅   Booking is made for services to be hired physical consumption such as booking for tickets for events, car hire hotel accommodation, etc.

✅  Online Teaching Services

✅  Advertising through TV, Posters, or Newspaper

GST registration Process and Eligibility:

Entities providing OIDAR Services are required to get GST Registration mandatorily regardless of the turnover criteria. The following types of taxable persons are mandatorily required to acquire GST Registration:

✅  Individuals initiating any inert-state sale

✅  Taxable person

✅  Individuals paying Tax Reverse Charge

✅  E-commerce Operators

✅  A Taxable person who is a non-resident

✅  Individuals required to deduct Tax

✅  Individual Acting as an agent or otherwise, on behalf of a registered taxable person to supply goods or services

✅  Individual who is to collect Tax

✅  E-commerce operator

Therefore, most OIDAR service Providers whether residents or non-residents providing services to Indian Residents from outside of India must acquire a GST Registration.

GST Registration for OIDAR Service Providers Established in India:

Any OIDAR Service provider with a place of business in India may proceed to obtain GST Registration through the regular method applicable to other taxpayers.

GST Registration for OIDAR Service Providers Established outside of India

Any OIDAR service provider with a place of Business not located in India and providing services to the residents of India must comply with GST Rules & Regulations. They shall obtain GST Registration by filing GST REG-10.