OIDAR Services under GST – Liability, Registration and Returns

OIDAR SERVICES

OIDAR Services is called as Online Information and Database Access or Retrieval Services. In this article, we will have a look on OIDAR services provisions under GST.

Online Information and Database Retrieval services are shortly known as OIDAR.

Update on 28-08-2017: Date extended to file GSTR-5A (OIDAR service providers return form) up to 15th September 2017 – Download Notification No.25-2017

What are OIDAR Services?

These services are delivered mainly over the internet. OIDAR services are managed by automated system and it has very minimum human involvement. The use of internet or the use of electronic means for facilitating the service does not means that the person is using the OIDAR services. The OIDAR service is that service which is delivered automatically electronically. The only services which are delivered in electronic form are covered whereas the physical goods like books, newsletter is delivered those are not covered and the services offered by the professionals received over email are also not covered. The advertisements in newspapers, television, posters etc are also not covered under OIDAR.

Below mentioned are some services which are received by the consumers of India from foreign providers. The following services will attract charge to GST.

  • Digital data storage service
  • Internet advertisement service
  • Downloading of e-books service
  • Online gaming service
  • Downloading of movies, music and software service
  • Online supply of digital content i.e. T.V Shows
  • Cloud Services

So there are some confusion over how to consider place of supply of OIDAR services. So lets understand in a detail manner as follow:

Under GST the place of supply is determined after considering two matters i.e.

  • Location of supplier: The registered place of the business of the supplier is the location of the supplier.
  • Place of supply: The registered place of the business of the recipient is the place of the supply.

The place of supply shall be the location of recipient for the online information and Database Access services.

The place of supply shall only determine the levy of tax. As we all know there are three taxes under GST i.e. CGST, SGST and IGST. The place of supply only can determine the levy of the tax.

GST Registration for OIDAR Services Suppliers

The supplier of OIDAR who is liable to pay IGST should get himself registered under the Simplified Registration Scheme. If there exist any person who is in taxable territory and is also representing the supplier should get the registration and pay IGST accordingly.

The following OIDAR service providers are required to get registered under GST:

  1. Casual taxable persons;
  2. Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;
  3. Persons who are required to collect tax;
  4. Electronic commerce operators;
  5. Electronic commerce operator
  6. Persons who are required to pay tax under reverse charge;
  7. Persons making any inter-State taxable supply;
  8. Persons who are required to deduct tax;
  9. Non-resident taxable persons;
  10. Input service distributor (whether or not separately registered under the Act)
  11. 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;

Check How to Do GST Registration in India Online?

OIDAR service provided who are not located in India but providing services in India are also need to register under GST through GST Reg-10 form.

Download GST Reg-10 Form

Liability to Pay Tax for OIDAR Service Providers

If any of the above service is provided by any supplier who is located outside India to a non-taxable online recipient* inside India, then the supplier who is located outside India shall be liable to pay IGST.

*Non- taxable online recipient means any person who is receiving these services for the purpose except the commerce, industry and is located in a taxable territory.

GST Returns for OIDAR Services Providers

OIDAR service providers are required to file GST returns as follows:

GST returns filing for OIDAR services providers located in India: They need to file GSTR-1, GSTR-2, GSTR 3 monthly and 1 GST return annually.  Know more about GST return and due dates here

GST returns filing for OIDAR services providers located outside India: They need to file GSTR-5A on or before 20th of each month. The should also appoint authorized representative in India to file GST returns.

Download GSTR 5A return format here

In case an intermediary

In case the service is facilitated by an intermediary who is located outside India, then he shall be liable to pay IGST as it is deemed that the service is received by the intermediary and that intermediary is supplying the service to non-taxable online recipient.

But in some cases, the intermediary is not liable to pay the tax. The case arises when the intermediary satisfies all of the following conditions:

  1. The bill issued by the intermediary identifies the supplier in non-taxable territory.
  2. Intermediary does not authorize the delivery.
  3. Intermediary is not responsible for the processing or collecting the payment between the supplier and recipient.
  4. The conditions and terms are set by the supplier only not by the intermediary.

Applicability of Reverse Charge in OIDAR

The person receiving any such services i.e. OIDAR should pay the IGST to the government only and only if he is registered under GST as a taxable person.


About the Author

Arpit Goyal is pursuing CA and B.com & also working as an article assistant in Gurgaon. He has an immense interest in Taxation. He loves to use technology to spread knowledge about taxation & accounts.

SIGN UP FOR FREE NEWSLETTER
Daily Updates by email
Don’t forget to click on the confirmation link in your email Inbox!

Leave a Reply

Your email address will not be published. Required fields are marked *

CutMyTax © 2017 About CutMyTax | Contact | Privacy Policy | Disclaimer | Copyright Policy | Sitemap