ONLINE INFORMATION DATABASE ACCESS AND RETRIEVAL (OIDAR) SERVICES IN GST
WHAT IS OIDAR?
Online information database access and retrieval services 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.
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 minimum human intervention and impossible to ensure in the absence of information technology and includes electronic services such as :
- advertising on the internet
- providing cloud services
- provision of e-books, movie, music, software, and other intangibles through telecommunication networks
- providing data , retrievable or otherwise , to any person in electronic form through a computer network
- online supplies of digital content ( movies , television shows, music and the like) digital data storage
- online gaming
PLACE OF SUPPLY:
SECTION 13 Place of supply of services where location of supplier or location of recipient is outside India- the place of supply of OIDAR services shall be the location of recipient of services.
Explanation- for the purpose of this sub section, person receiving such services shall be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied namely:-
a) The location of address presented by the recipient of services through internet is in the taxable territory.
b) The credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory
c) The billing address of the recipient of services is in the taxable territory.
d) The internet protocol address of the device used by the recipient of services is in the taxable territory.
e) The bank of the recipient of services in which the account used for payment is maintained is in the taxable territory.
f) The country code of the subscriber identity module card used by the recipient of services is of taxable territory.
g) The location of the fixed land line through which the service is received by the recipient is in the taxable territory.
SECTION-14 Special provision for payment of tax by a supplier of OIDAR services-
1. On supply of OIDAR services by any person located in a taxable territory and received by a non –taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying the integrated tax on such supply of services.
Provided that in the case of supply of OIDAR services by any person located in the non taxable territory and received by the non-taxable online recipient , an intermediary located in the non-taxable territory , who arranges or facilities the supply of such services , shall be deemed to be the recipient of such services from the supplier of services in non-taxable territory and supplying such services to the non-taxable online recipient except when such intermediary satisfies the following namely :-
| 1. | The invoice or customer’s bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in The non-taxable territory. |
| 2. | The intermediary involved in the supply does not authorize the charge to the customer Or take part in its charge which is 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 such services. |
| 3. | The intermediary involved in the supply does not authorize delivery. |
| 4. | The general terms and conditions of the supply are not set by the intermediary Involved in the supply but by the supplier of services. |
2.The supplier of OIDAR services referred to I sub section (1) shall , for payment of Integrated tax , take a single registration under the simplified registration scheme in FORM GST REG-10 to be notified by the government.
→Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay integrated tax on behalf of the supplier.
→Provided further that if such 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 OIDAR 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,–
- Set by an act of parliament or a state litigation
- Established by any government With ninety percent or more participation by the way of equity or control, to carry out any function entrusted to a municipality under article 243W of the constitution.
Example of what could be or could not be OIDAR services.
| Service | Whether provisions of service mediated by information technology over the internet or an electronic network. |
Whether it is automated and impossible to ensure in the absence of Information technology |
OIDAR Services |
| PDF documents manually emailed by provider |
Yes | No | No |
| PDF documents automatically emailed by provider’s system |
Yes | Yes | Yes |
| PDF document automatically downloaded from site |
Yes | Yes | Yes |
| Stock photograph available for automatic download |
Yes | Yes | Yes |
| Online course consisting of pre-recorded videos and downloadable PDF’s | Yes | Yes | Yes |
| Online course consisting of pre-recorded videos and downloadable PDF’s plus support from a live tutor | Yes | No | No |
| Individually commissioned content sent in digital form E.g photograph , reports, medical results |
Yes | No | No |
Registration: compulsory registration
Every person supplying OIDAR services from a place outside india to a person in india, other than a registered person.
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 OIDAR 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 20th day of the month succeeding the calendar month or part thereof.
Compiled by- CA Rohit Aggarwal, [B.Com, M.Com, CA, CS(F)], GST ki shiksha
Author Bio
Membership /access of website also taxable under OIDAR .