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Author: Payal Dang
Published On:November 22,2017

OIDAR Services Under GST

Online Information Database Access Retrieval Services (OIDAR) is a category of services provided through the medium of internet and received by the recipient online without any physical interface with the supplier of such services.

OIDAR means services whose delivery is mediated by information technology over the internet and electronic network and the nature of which renders their supply essentially automated having minimal human intervention. 

NATURE OF OIDAR SERVICE

The nature of OIDAR service is to be such that it would be provided through online from a location outside India. 

This includes services as:

TAX TREATMENT 

OIDAR Services provided by an Indian Service provider from, within taxable territory to recipients in India would be taxable. Further such services received by a registered entity (entity registered in GST) in India from an overseas supplier, it would be taxable under reverse charge. Overseas supplier would have an unfair tax advantage.                     

WHO WILL BE RESPONSIBLE TO PAY TAX

*     Service receiver if recipient is registered in GST and Supplier is in Non-taxable Territory, the Service receiver will pay the tax under reverse charge.

*    By Supplier /intermediary where OIDAR services is provided by Non-taxable territory to unregistered person or individual.  

Any person located in the taxable terriority representing such supplier for any purpose in the taxable territory shall get registered and pay integrated tax on behalf of supplier And if supplier does not have any physical presence and a representative then he may appoint a person in India for the purpose of paying Integrated tax and such person shall be liable for payment of tax.

An Intermediary is liable to pay IGST if the OIDAR services facilitated by the intermediaries located in a non-taxable territory and received by a non-taxable online recipient in general, except in the following circumstances an Intermediary will not liable to pay tax.

*     The invoice is issued by such intermediary clearly indicates the service in question and its supplier is in Non taxable territory.

*     The intermediary neither collects/process the payment nor is responsible for payment between unregistered person and supplier of such services.

*     The intermediary does not authorise delivery

*     The general terms and conditions of the supply are not set by intermediary but by the supplier of such services.  

REGISTRATION PROVISIONS

Notes* 

*     The application for GST Registration must be submitted at least 5 days before commencement of business in India.

*     Foreign company may appoint a representative in India for obtaining GST Registration and filing of Returns.

*     The application of GST Registration for OIDAR Services providers can be submitted electronically with self-attested copy of valid passport of the promoters and tax identification number or unique identification number issued by foreign government or PAN.

 GST RETURNS 

*     Service Providers located in India OIDAR services providers located in India would have to file GSTR1, GSTR 3B and annual return by a regular taxpayer.

 *     Service Providers located outside India OIDAR services provider located outside India would have to file GSTR 5A on or before 20th of each month