Summary of Outward Taxable Supplies and Tax Payable by a Person Supplying OIDAR Services

Online Information and Database Access or Retrieval (OIDAR) services have specific GST provisions in India due to their digital nature. Understanding how outward supplies are reported and how tax is payable is essential for compliance.

What are OIDAR Services?

As per Section 2(17) of the IGST Act, OIDAR services are services delivered over the internet or an electronic network, where supply is impossible without information technology.

Examples include:

• Online subscriptions (e-books, music, streaming)
• Cloud services and SaaS platforms
• Online gaming and digital advertising

Place of Supply for OIDAR Services

The place of supply is crucial for determining taxability.

• As per Section 13(12) of the IGST Act, the place of supply for OIDAR services is the location of the recipient.
• If the recipient is located in India, GST is applicable.

Taxability and Rate

• GST rate on OIDAR services is 18% (IGST).
• The supply becomes taxable when:
  • The recipient is located in India, and
  • The place of supply is in India

Tax Liability Mechanism

The liability depends on the nature of the recipient:

1. Supply to Registered Persons (B2B)

• Tax is payable under Reverse Charge Mechanism (RCM)
• The recipient (registered taxpayer in India) pays GST

2. Supply to Unregistered Persons (B2C / NTOR)

• As per Section 14 of the IGST Act:
  • If the supplier is located outside India and supplies to a non-taxable online recipient,
  • The supplier is liable to pay IGST

Summary of Outward Taxable Supplies (GSTR-5A)

Non-resident OIDAR service providers are required to file Form GSTR-5A.

The summary of outward taxable supplies includes:

• State-wise details of supply (place of supply)
• Taxable value of services
• Applicable IGST
• Any interest, penalty, or late fees payable

Registration Requirements

• Foreign OIDAR service providers must obtain GST registration (Form GST REG-10)
• No threshold exemption applies — registration is mandatory even for a single transaction

Key Compliance Points

• Determine recipient location using indicators like billing address, IP address, etc.
• Charge IGST correctly based on recipient type
• File GSTR-5A by the 20th of the following month
• Maintain proper transaction records for audit and reporting

Conclusion

OIDAR services are taxed based on the recipient’s location, with distinct rules for B2B and B2C supplies. Proper classification, reporting of outward supplies, and timely tax payment are critical to avoid penalties and ensure smooth compliance.

For expert guidance on this topic, contact your tax professional today.