India taxes digital services supplied from abroad to Indian customers under a special category of GST called OIDAR, which stands for Online Information and Database Access or Retrieval services. If you run a SaaS product, sell e-books, courses, streaming, cloud storage, online advertising, games or any other automated digital service to people in India, this guide explains when Indian GST applies to you, how to register, and what ongoing compliance looks like.
What counts as OIDAR
OIDAR services are services delivered over the internet or an electronic network, where the supply is essentially automated, involves minimal human intervention and would be impossible without information technology. Under current rules the definition includes:
- Online advertising and advertising space on websites or apps.
- Cloud services, software as a service and hosted applications.
- Supply of e-books, music, movies, games and software by download or streaming.
- Digital data storage and online data warehousing.
- Online gaming, including real-money gaming under its own tax rules.
- Distance teaching that is automated and does not depend on live human interaction.
Services that need significant human involvement, such as bespoke consulting delivered by email or live one-to-one tutoring, are not OIDAR. They may still be taxable in India in other ways, but not under this scheme.
Who must register
A supplier located outside India must register for GST in India if it supplies OIDAR services to a non-taxable online recipient, which under current rules means any unregistered person in India, whether or not the use is for business. There is no turnover threshold for foreign OIDAR suppliers. If all your Indian customers are GST-registered businesses, you do not need to register, because those customers pay the tax under reverse charge. In practice, most consumer-facing digital businesses need to register because they cannot verify that every customer is registered.
Practical tip: build GSTIN capture into your checkout for Indian customers. A valid 15-character GSTIN shifts the tax to the customer under reverse charge and keeps that sale out of your GSTR-5A. Without it, you must treat the sale as B2C and pay 18% IGST on it yourself.
Rate and place of supply
OIDAR services are charged to IGST at 18% under current rules. The place of supply is the location of the recipient. A recipient is treated as being in India if at least two of a set of indicators point to India, such as the billing address, the payment card issuing bank, the IP address, the country code of the SIM card, or the bank account used for payment. Keep these indicators in your records, because they are the evidence that a sale was, or was not, taxable in India.
Registration in Form GST REG-10
- 1
Appoint a representative if needed: A foreign supplier may apply directly or through a representative in India. Where the supplier has a representative in India for any purpose, that representative is required to obtain registration and pay the tax.
- 2
Prepare the application: Form GST REG-10 is a simplified application that asks for the supplier's details, the tax identification number in the home country, the authorised signatory, bank details and a self-attested copy of the signatory's identity. A digital signature or an alternative verification method is used to sign.
- 3
Submit online: The form is filed on the GST portal. Under current rules there is no advance deposit for OIDAR registration, unlike the non-resident taxable person scheme.
- 4
Receive the GSTIN: Once approved, a GSTIN is issued and the supplier is treated as registered in India for the OIDAR scheme only. The registration does not permit other business in India.
Monthly return in GSTR-5A
Registered OIDAR suppliers file Form GSTR-5A every month, due on the 20th of the following month under current rules, even if there were no supplies in the month. The return reports the taxable value and IGST on supplies to non-taxable online recipients, with a state-wise breakdown based on the place of supply. Tax is paid before or at the time of filing. There is no input tax credit under this scheme, so the return is simpler than a regular GSTR-3B. Late filing attracts a late fee and interest.
Invoicing and records
- Issue a tax invoice to Indian customers showing your GSTIN, the customer's state, the taxable value, IGST at 18% and the total.
- For registered customers, mention the customer's GSTIN and that tax is payable by the recipient under reverse charge.
- Invoices may be in a foreign currency, but the GSTR-5A must report rupee values using the exchange rate on the date of supply. Store the rate used.
- Keep records for the period required under the GST law and make them available if the department requests them.
Paying GST from abroad
Tax can be paid through the GST portal using the available online payment options. Many foreign suppliers either open an Indian bank account through their representative or use an international money transfer in rupees to the GST payment challan. Pay a day or two early, because the payment must reflect in the electronic cash ledger before the return can be filed. Interest runs from the due date on any shortfall.
OIDAR vs NRTP: which scheme is yours
OIDAR is for remote digital services with no physical presence. The non-resident taxable person (NRTP) scheme is for a foreign business that occasionally supplies goods or services physically in India, such as an exhibitor at a trade fair. If you are unsure, use our quick check tool to see which registration applies to you, and read our NRTP guide for the exhibitor route.
Fastlegal can act as your Indian representative, obtain the OIDAR registration, file GSTR-5A every month and handle any notices, so that your team never needs to log in to the GST portal.
Frequently asked questions
Is there a turnover threshold below which a foreign OIDAR supplier does not need to register?↓
No. Under current rules the general threshold exemption does not apply to OIDAR suppliers located outside India. If you supply OIDAR services to unregistered persons in India, registration is required from the first rupee of supply.
Do we have to charge GST to Indian business customers?↓
If your customer is registered under GST in India and receives the service for business, the customer pays IGST under reverse charge and you do not charge it. You should still record the customer's GSTIN on the invoice. Only supplies to unregistered persons (consumers, and businesses without a GSTIN) are taxed in your hands.
Can we file GSTR-5A ourselves from abroad?↓
Yes. The return is filed online on the GST portal and can be completed from anywhere. Many foreign suppliers still appoint an Indian representative or filing agent so that notices in Hindi or English are handled promptly and payments are made through an Indian bank or an approved international card facility.
Does OIDAR registration give us input tax credit?↓
No. The simplified OIDAR scheme is output-tax only. You cannot claim credit for any Indian GST charged to you, for example by an Indian hosting provider. If you have substantial Indian costs, discuss whether a different structure makes sense.
What if we sell through an app store or marketplace?↓
Where an intermediary such as an app store or marketplace is involved in supplying the service, the intermediary is generally treated as the supplier and must handle Indian GST, unless specific conditions are met showing it is only a payment processor. Check your platform agreement to see who is taking responsibility.
This guide is general information under rules current at the date shown, not professional advice for your situation. Rules, due dates and fees change by notification.
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