GST - OIDAR services

- one typical issue of OIDAR

1. Mr.X is a normal tax payer. Mr. X has online backup server a
In Maharashtra and another backup server at Gujarat. 

He makes payment of bill raised by MrB who has registered office at Gujarat.

Mr.B charges IGST for providing services related to server located at Maharashtra.

Mr.B charges CGST /SGST for providing services related to server located at Gujarat.

Accounting for Mr. B is simple and perfect.

The problem is how should Mr.X do the accounting of bill for services on server located at Gujarat??? 

Secondly, how to file returns to claim ITC ???

Replies (2)
Quick Summary
This discussion clarifies GST implications for Indian businesses receiving OIDAR (Online Information and Database Access or Retrieval) services. It highlights that if a foreign provider isn't registered in India, the Indian business is liable for GST under Reverse Charge Mechanism (RCM). The business must self-assess, pay GST in GSTR-3B, and can claim Input Tax Credit (ITC) immediately in the same return period, provided the service is for business use and not restricted. The scope of OIDAR services has broadened, so reviewing your digital service vendors is advisable.

As per Place of supply provisions Mr. X is not eligible to avail ITC. 

For a GST-registered Indian business receiving OIDAR services from a foreign provider (Google, AWS, Zoom, LinkedIn Ads, etc.), you are the one responsible for GST under RCM if the foreign provider is not registered in India. You self-assess the GST, pay it in GSTR-3B, and can immediately claim it back as ITC in the same return period, as long as the service is used for business and is not blocked under Section 17(5). The newer broad definition of OIDAR post-2023 means more hybrid digital services qualify, so it is worth reviewing your vendor list. Full compliance guide including GSTR-5A and the ITC claim process: https://taxgarden.in/blog/oidar-gst-compliance-india-2026-foreign-digital-services-gstr-5a

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