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We live in an age of rapidly evolving technology from day to day life to all types of business. Business takes different forms with new technology day by day; like ordering food on line, on line entertainment, Online shopping, Online game, Online Education. These business have more impact on B2B and B2C segments with increasing in the speed of internet. These business have eliminated the infrastructure for doing these business, as if the business goes on in a virtual world.

It was difficult to monitor these business to arrive at the supplier, receiver, time of supply to bring in to tax purview as these business are more dynamic with high technology . Any people can part of this business with any one across globe.

Online Information Database Access and Retrieval services (OIDAR)

Online Information Database Access and Retrieval services (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.

The IGST Act defines OIDAR as 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 involving minimal human intervention.

These include 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
(vii) Online gaming

The below points to satisfied to fall under OIDAR service;

  • The services being delivered by use of information technology over the internet or an electronic network
  • The nature of such services renders their supply essentially automated involving minimal human intervention

Reasons of Levy of Tax on OIDAR

The nature of OIDAR services are such that it can be provided online from a remote location outside the taxable territory.

If the supplier of service is based outside India, then there was no tax . If the service supplier for a similar service is in India to recipients in India would be taxable. As a result of this, 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. To bring them at par the government has levied tax on service suppliers located outside India named with OIDAR service. Also Govt come out with a simplified scheme of registration for such service providers located outside India.

This law is in line with the recommendations made by OECD regarding tax challenges of digital transactions in cross border transactions across globe.

Taxability of OIDAR services under GST

When 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. When the supplier of service is located outside India and the recipient is located in India, the place of supply will be India.

Persons liable for Tax under GST for OIDAR Service

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 (registered entity under GST) will be liable to pay GST under reverse charge and undertake necessary compliances.

On supply of online information and database access or retrieval services by any person located in a non-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 integrated tax on such supply of services.

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) 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

(c) The intermediary involved in the supply does not authorise delivery

(d) The general terms and conditions of the supply are not set by the intermediary involved in the supply but by the supplier of services .

Registration of OIDAR Service Provider

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.

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.

Non-Taxable Online Recipient under OIDAR Service

'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.

Return Filling by overseas OIDAR Service Provider

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.

Examples of what could be or could not be OIDAR services

The inclusive part of the definition of OIDAR services are only indicative and not exhaustive. To determine if a particular service is an OIDAR service, the following test can be applied:


Whether the Provision of Service mediated by Technology over the Internet or an Electronic Network

Whether it is automated and impossible to ensure in the absence of technology

Is this an OIDAR Service?

PDF Document manually emailed by provider




PDF Document automatically emailed by provider's system




PDF Document automatically downloaded from website




Stock Photographs available for automatic download




Online Course consisting of pre-recorded videos and downloadable PDF's




Online Course consisting of pre-recorded videos and downloadable PDF's plus support from a live tutor




Individually commissioned content sent in digital format i.e. photographs, reports, medical results etc




Examples of OIDAR Service

Indicative List of OIDAR Services

1. Website supply, web-hosting, distance maintenance of programmes and equipment

(a) Website hosting and webpage hosting
(b) Automated, online and distance maintenance of programmes
(c) Remote systems administration
(d) Online data warehousing where specific data is stored and retrieved electronically
(e) Online supply of on-demand disc space

2. Supply of software and updating thereof

(a) Accessing or downloading software (including procurement/accountancy programmes and anti-virus software) plus updates
(b) Software to block banner adverts, otherwise known as Banner blockers
(c) Download drivers, such as software that interfaces computers with peripheral equipment (such as printers)
(d) Online automated installation of filters on websites
(e) Online automated installation of firewalls

3. Supply of images, text and information and making available of databases

(a) Accessing or downloading desktop themes
(b) Accessing or downloading photographic or pictorial images or screensavers
(c) The digitised content of books and other electronic publications
(d) Subscription to online newspapers and journals
(e) Weblogs and website statistics
(f) Online news, traffic information and weather reports
(g) Online information generated automatically by software from specific data input by the customer, such as legal and financial data, (in particular, data such as continually updated stock market data, in real time)
(h) The provision of advertising space including banner ads on a website/web page
(i) Use of search engines and Internet directories

4. Supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events

(a) Accessing or downloading of music on to computers and mobile phones
(b) Accessing or downloading of jingles, excerpts, ringtones, or other sounds
(c) Accessing or downloading of films
(d) Downloading of games on to computers and mobile phones
(e) Accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are geographically remote from one another

5. Supply of distance teaching

(a) Automated distance teaching dependent on the Internet or similar electronic network to function and the supply of which requires limited or no human intervention. These include virtual classrooms, except where the Internet or similar electronic network is used as a tool simply for communication between the teacher and student

(b) Workbooks completed by pupils online and marked automatically, without human intervention .


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(Chartered Accountant)
Category GST   Report

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