Online Information Data Base
Access and Retrieval (OIDAR)
(Goods & Services Tax)
What is OIDAR?
Online Information Database Access and Retrieval services
(hereinafter referred to as OIDAR) is a category of services
provided through the medium of internet and received by the
recipient online without having any physical interface with the
supplier of such services. E.g. downloading of an e-book online
for a payment would amount to receipt of OIDAR services by the
consumer downloading the e-book and making payment.
The IGST Act defines OIDAR to mean 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
and includes electronic services such as, ––
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other
intangibles through telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to
any person in electronic form through a computer network;
(v) online supplies of digital content (movies, television shows,
music and the like);
(vi) digital data storage; and
(vii) online gaming;
Why OIDAR is requires a treatment different from other services?
The nature of OIDAR services are such that it can be provided
online from a remote location outside the taxable territory. A
similar service provided by an Indian Service Provider, from
within the taxable territory, to recipients in India would be
taxable. Further, such services received by a registered entity in
India would also be taxable under reverse charge. The overseas
suppliers of such services would have an unfair tax advantage
should the services provided by them be left out of the tax net. At
the same time, since the service provider is located overseas and
may not be having a presence in India, the compliance verification
mechanism become difficult. It is in such circumstances, that the
government has plans to come out with a simplified scheme of
registration for such service providers located outside.
How would OIDAR services be taxable under GST?
For any supply to be taxable under GST, the place of supply in
respect of the subject supply should be in India. In case, both the
supplier of OIDAR Service and the recipient of such service is in
India, the place of supply would be the location of the recipient
of service i.e. it would be governed by the default place of supply
What happens in cases where the supplier of service is located
outside India and the recipient is located in India. In such cases also
the place of supply would be India and the transaction would be
amenable to tax
Who will be responsible for paying the tax?
In cases where the supplier of such service is located outside India
and the recipient is a business entity (registered person) located
in India, the reverse charge mechanism would get triggered and
the recipient in India who is a registered entity under GST will be
liable to pay GST under reverse charge and undertake necessary
So far so good. Now what happens if the supplier is located outside
India and the recipient in India is an individual consumer. In such
cases also the place of supply would be India and the transaction is
amenable to levy of GST, but the problem would be, how such tax
would be collected. It would be impractical to ask the individual in
India to register and undertake the necessary compliances under
GST for a one off purchase on the internet.
For such cases the IGST Act provides that on supply of online
information and database access or retrieval services by any
person located in a non-taxable territory and received by a nontaxable online recipient, the supplier of services located in a
non-taxable territory shall be the person liable for paying
integrated tax on such supply of services.
Now if an intermediary located outside India arranges or facilitates
supply of such service to a non-taxable online recipient in India, the
intermediary would be treated as the supplier of the said service,
except when the intermediary satisfies the following conditions:-
(a) The invoice or customer’s bill or receipt issued by such
intermediary taking part in the supply clearly identifies the
service in question and its supplier in non-taxable territory
(b) he intermediary involved in the supply does not authorise
the charge to the customer or take part in its charge. This
means that the intermediary neither collects or processes
payment in any manner nor is responsible for the payment
between the non-taxable online recipient and the supplier of
(c) he intermediary involved in the supply does not authorise
(d) he general terms and conditions of the supply are not set by
the intermediary involved in the supply but by the supplier of
How would the entity located outside India comply with the
responsibilities entrusted under GST?
TThe supplier (or intermediary) of online information and database
access or retrieval services shall, for payment of integrated tax,
take a single registration under the Simplified Registration Scheme
in Form GST REG-10. The supplier shall take registration at Principal
Commissioner of Central Tax, Bengaluru West who has been the
designated for grant registration in such cases.
In case there is a person in the taxable territory (India) representing
such overseas supplier in the taxable territory for any purpose,
such person (representative in India) shall get registered and pay
integrated tax on behalf of the supplier:
In case the overseas supplier does not have a physical presence
or does not have a representative for any purpose in the taxable
territory, he may appoint a person in the taxable territory for the
purpose of paying integrated tax and such person shall be liable
for payment of such tax.
Who is a Non-Taxable Online Recipient?
“Non-Taxable Online Recipient” means any Government, local
authority, governmental authority, an individual or any other
person not registered and receiving online information and
database access or retrieval services in relation to any purpose
other than commerce, industry or any other business or profession,
located in taxable territory.
The expression “governmental authority” means an authority or a
board or any other body, –
(i) set up by an Act of Parliament or a State Legislature or
(ii) established by any Government
with ninety per cent or more participation by way of equity or
control, to carry out any function entrusted to a municipality under
article 243W of the Constitution
Filing of Returns by a person providing OIDAR service to a non
taxable online recipient in India.
In terms of Rule 64 of CGST Rules, 2017, every registered person
providing online information and data base access or retrieval
services from a place outside India to a person in India other
than a registered person shall file return in FORM GSTR-5A on or
before the twentieth day of the month succeeding the calendar
month or part thereof.
The Central Government vide notification no.69/2017-Central Tax
dated 21.12.2017 has extended the time limit for furnishing the
return in FORM GSTR-5A for the months of July, 2017, August,
2017, September, 2017, October, 2017, November, 2017 and
December, 2017 by a person supplying online information and
database access or retrieval services from a place outside India
to a non-taxable online recipient referred to in section 14 of the
Integrated Goods and Services Tax Act, 2017 and rule 64 of the
Central Goods and Services Tax Rules, 2017, till the 31st day of
It is to be noted that GSTR-5A is required to be filed only by the
service provider (or his representative) providing OIDAR services
from outside India to a non-taxable online recipient in India.
Other categories of OIDAR service providers (like those supplying
OIDAR services from India) will have to file regular returns (GSTR
1, 2, 3/3B) prescribed for general categories of registered persons.