OIDAR SERVICES-Forward charge or Reverse Charge?

This is a great and nuanced GST query, Balamani. Let’s break it down based on the OIDAR (Online Information and Database Access or Retrieval) services provisions under the GST Law in India.

💡 Summary Answer:

If the OIDAR service provider has a physical presence or fixed establishment in India and is issuing invoices in INR, then the forward charge mechanism applies — not reverse charge — even if they mention an overseas address on the receipt.

Let’s dig deeper 👇

🧾 What the Law Says: OIDAR & RCM

🔹 OIDAR services under GST:

Defined in Section 2(17) of the IGST Act as services delivered over the internet (like cloud storage, software downloads, etc.), with minimal human intervention.

🔹 When RCM applies:

As per Notification No. 10/2017 – IGST (Rate):

If an OIDAR service is supplied by a person located in a non-taxable territory and received by a non-taxable online recipient (NTOR) (which includes even registered persons in some cases), RCM applies.

👉 So, if the supplier is located outside India, and has no physical presence in India, then RCM applies.

🔍 Your Case: Key Factors

Factor	Status in Your Case	Impact
Presence in India	Supplier has subsidiary/branch in India	✅ Treated as having a taxable presence
Billing in INR	Yes, INR billing and local bank transactions	✅ Suggests Indian operation, not foreign import
Invoices & Receipts	Show overseas address, but domestic transactions via credit card	⚠️ Slightly confusing, but not enough to override other facts
Credit card shows Domestic Transaction	Yes	✅ Indicates no foreign exchange remittance

✅ Conclusion:

If the supplier is registered in India, billing in INR, and has a presence/subsidiary in India, the transaction is treated as a domestic supply, and forward charge applies.

In this case, supplier should charge GST, collect it, and remit it.
You (the recipient) do not need to pay GST under reverse charge.

⚠️ Caution – Overseas Address on Invoice?

That alone does not determine the tax liability. What matters is:

Whether the supplier is registered in India
Whether the billing and collection is handled in India
Whether the supply is made through the Indian subsidiary

If all that is yes, RCM doesn't apply, even if the invoice mentions a foreign HQ.

✅ What You Should Do:

Ask the supplier:
- Are you registered under GST in India?
- Can you share your GSTIN?
- Why is your invoice showing an overseas address despite being a domestic transaction?
Check if they charged GST in past invoices:
- If yes → forward charge applies
- If no → you might need to evaluate whether RCM applies (only if their Indian presence is not registered for GST)
Keep documentation: Credit card statements, GST invoices (if any), and correspondence, for audit trail.