GST implication in case of Online Information Data Base Access and Retrieval services

1. What is Online Information Data Base Access and Retrieval (OIDAR)

It 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.

2. Example of OIDAR services

• Provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet (like: Google books).
• Online supplies of digital content (movies, television shows, music) like: Amazon prime, Udemy, Netflix.
• Providing cloud services.
• Digital data storage
• Online course consisting of pre-recorded videos and downloadable PDFs (like:-Udemy).

3. What is Not an OIDAR services

• Online course consisting of pre-recorded videos and downloadable PDFs plus support from a live tutor.
• PDF document manually emailed by service provider

4. Why OIDAR required

OIDAR is required to mitigate unfair tax advantage to Overseas suppliers  as now

• If a similar service is provided by an Indian Service Provider, from India to recipients in India then such service would be taxable.

• If such services are received by a registered entity in India then GST will be payable under reverse charge.

5. Registration of OIDAR

The 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.

6. Place of supply in case of OIDAR

• Supplier & recipient in India:-Place of supply is a location of recipient.
• Supplier located outside India: Place of supply is in India (IGST chargeable).

7. Responsible for paying tax

    Supplier of services located outside India:

• If recipient is register under GST:-Recipient is liable to pay tax under RCM.
• If recipient is not register: Supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services.

    Supplier of services is in India: Supplier is liable for pay tax.

8. Filling of Return

Every registered person providing online information and data base access or retrieval services from a place outside India to a person in India (It may be noted that if OIDAR services provided from India then normal return GSTR-1, GSTR 3B is to be filed) 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.