OIDAR Services: Meaning, Examples and GST Rules in 2026

OIDAR stands for Online Information and Database Access or Retrieval services. In brief, OIDAR services are digital services delivered over the internet or an electronic network whose supply is impossible without information technology, as defined in Section 2(17) of the IGST Act after its amendment from 1 October 2023.

Think streaming subscriptions, cloud software, e-books, online gaming and online advertising, supplied to a recipient without any physical touchpoint.

The concept matters because it decides where the supply is taxed and, when a foreign supplier sells to Indian consumers, who has to register and pay GST in India.

If you are an Indian digital business that also sells abroad, the mirror rules govern your invoicing too, and platforms built for cross-border payments for service exporters help you receive those export payments compliantly.

This guide covers the OIDAR full form and definition, a full examples table, the place-of-supply rule, who counts as a non-taxable online recipient, when a foreign supplier must register, the GSTR-5A return, reverse charge, and several worked examples with named businesses.

This is general information, not tax advice, so confirm specifics with a CA.

GST collected on OIDAR services has grown from about ₹80 crore in 2017-18 to about ₹2,675 crore in 2023-24, as reported in 2025, and tax authorities have stepped up checks on foreign platforms that sell to Indian users without registering.

What is the OIDAR full form in GST?

The OIDAR full form in GST is Online Information and Database Access or Retrieval services. The label sounds technical, but the idea behind it is plain.

It describes any service that a buyer receives over the internet that is delivered over the internet and could not be supplied at all without information technology.

The term entered Indian tax law because the old rules could not tax value that had no address.

A foreign company could sell a subscription to a buyer in Chennai without an office, a server or a single employee in India.

Traditional place-of-supply logic keyed tax to where the supplier or the goods physically sat, so digital supplies slipped through. OIDAR closes that gap by naming the category and moving the tax to where the recipient is.

So when you see "OIDAR" on a GST notice, an invoice from a foreign app, or a CA's advice, read it as the umbrella term for digital services delivered through information technology that are taxable in India when the buyer is here.

What is the OIDAR meaning in GST under Section 2(17)?

Under Section 2(17) of the IGST Act, as amended from 1 October 2023, OIDAR services are services whose delivery is mediated by information technology over the internet or an electronic network, and whose nature makes their supply impossible to ensure without information technology. The definition includes a list of examples such as online advertising, cloud services, e-books, music and films, data on the internet, online gaming and online education.

Three characteristics decide whether a service is OIDAR:

• Delivered online: the service reaches the buyer over the internet or an electronic network, not by hand, post or in person.
• Mediated by information technology: technology, not just a person, is what delivers the service.
• Impossible without information technology: if the service could not be supplied at all without IT, it is OIDAR, even if people are involved in producing it.

What are some OIDAR services examples?

The law lists broad categories, and most consumer and business digital products fall inside one of them. The table below maps each OIDAR services example to a familiar product so you can place your own case quickly.

A useful contrast makes the boundary clear. Live one-to-one tutoring over video is less clear: a teacher delivers it and IT is the channel, so its treatment depends on the facts after the 2023 change. A pre-recorded, self-paced course is OIDAR, because software delivers it automatically.

The same logic separates automated gst on software services delivered as a product from bespoke, human-delivered consulting that happens to arrive over email.

The distinction is not academic. It decides whether a foreign vendor must register in India, and whether the 18% appears on the buyer's invoice or is self-assessed by the buyer.

When you cannot tell, ask one question: could this service be supplied at all without information technology? If not, it is usually OIDAR.

What changed for OIDAR services from 1 October 2023?

The Finance Act 2023 widened OIDAR in four ways from 1 October 2023. First, the 'essentially automated and involving minimal human intervention' wording was removed from the definition and replaced with the test that the supply is impossible without information technology, so services with some human input are no longer automatically outside OIDAR. Second, online gaming was added to the examples.

Third, a non-taxable online recipient now means any unregistered person in India receiving OIDAR services, instead of only those using the service for non-business purposes. Fourth, the separate treatment of government and local authority buyers was removed. The result is that more foreign digital suppliers must register and charge GST on sales to Indian buyers who are not registered under GST.

Who is a non-taxable online recipient (NTOR)?

A non-taxable online recipient (NTOR) is any person in India who receives OIDAR services and is not registered under GST, such as an individual consumer, a small unregistered business or, since October 2023, a government office or local authority that is not registered. In simple terms, it usually means an individual consumer or an unregistered person.

The distinction is central to the whole framework. When a foreign supplier sells OIDAR to an NTOR, the supplier must register in India and account for the GST itself.

When the recipient is a registered business, the position flips to reverse charge, covered further below.

So a single foreign platform can face both outcomes at once: it registers and charges GST on sales to consumers, while its business customers self-assess on their own.

This is why global apps often ask, at checkout, whether you are buying for personal or business use and request a GSTIN. That prompt is not marketing.

It is how the seller decides whether it must collect the 18% or leave the buyer to handle reverse charge.

What is the place of supply for OIDAR?

For OIDAR, the place of supply is the location of the recipient of services, under Section 13(12) of the IGST Act. If the recipient is in India, the supply is taxable in India, and GST on OIDAR is generally 18%.

Because a foreign supplier rarely knows exactly where an online buyer sits, the law provides a proxy test. The recipient is deemed to be located in India if any two of seven specified conditions are met.

The 2-of-7 conditions used to locate the recipient in India are:

• IP address: The device's internet protocol address is in India.
• Billing address: The billing address on file is in India.
• Card issued in India: The credit or debit card used was issued in India.
• Bank account: The bank the buyer pays from is in India.
• SIM country code: The mobile country code of the SIM used is India's.
• Fixed landline: The fixed landline through which the service is received is in India.
• Address given by the customer: the address the buyer provides when signing up is in India.

If any two of these point to India, the supplier treats the recipient as located in India and charges GST accordingly.

Consider a buyer with an Indian billing address paying by a card issued in India: that is two markers, so the supply is Indian even if the person happens to be travelling abroad that week.

The two-signal rule keeps the test practical for platforms processing millions of small transactions.

What is the GST rate for OIDAR services?

OIDAR services are taxed at 18% IGST in India. The rate is the same whether the foreign supplier collects it from an unregistered buyer or a registered Indian business pays it under reverse charge; what changes is who pays the tax to the government.

An Indian company selling the same kind of digital service to Indian customers simply charges normal GST at 18% (CGST and SGST, or IGST for another state) in its regular returns; OIDAR rules are about foreign suppliers. After the GST rate changes of 22 September 2025, most services sit at 18%, which includes OIDAR, IT and software services. A short list moved to 5%, such as hotel rooms up to ₹7,500 a night and cinema tickets up to ₹100.

Who must register for OIDAR in India?

A foreign supplier making OIDAR supplies to a non-taxable online recipient in India must register in India from the very first transaction. There is no ₹20 lakh turnover threshold and no small-supply exemption for these cross-border digital supplies.

One sale to one Indian consumer is enough to trigger the obligation.

Registration uses a simplified route. The overseas supplier, or an appointed representative in India, obtains registration in Form GST REG-10 without needing a physical presence in the country.

This keeps the compliance light while still bringing the revenue into the GST net.

The simplified registration does not allow input tax credit on Indian procurements, because the supplier has no Indian operations to set off; it is a pure output-tax mechanism.

The question of who must register for OIDAR therefore has a short answer for consumers-facing platforms: if you sell digital services delivered through information technology to Indian individuals, you register, full stop.

The nuance only appears when your buyers are registered businesses, at which point reverse charge does the collecting instead.

When an OIDAR service is sold through an online platform or app store based outside India, the platform is usually treated as the supplier for GST and must register and pay the tax, unless the actual supplier is clearly identified on the invoice and the platform does not set the terms of supply. Since 1 October 2023, offshore online money gaming companies have their own simplified registration rule under Section 14A of the IGST Act.

What is GSTR-5A for OIDAR suppliers?

GSTR-5A is the monthly return that a registered OIDAR supplier files to report supplies made to non-taxable online recipients in India and to pay the GST due. It is filed by the 20th of the following month.

The return captures the taxable value and the GST collected on OIDAR supplies to Indian consumers.

Because the simplified registration does not allow input tax credit on Indian procurements, GSTR-5A for OIDAR is essentially an output-tax declaration: value sold to Indian NTORs, tax collected, tax paid.

There is no offset column to work through, which is one reason the compliance is manageable even for a foreign team with no India office.

Indian businesses do not file GSTR-5A for their own exports. Those flow through the regular returns such as gstr 1 for export of services, which is a completely separate track.

Confusing the two is a common early mistake, so keep them mentally apart: GSTR-5A is for the foreign supplier selling in; GSTR-1 and GSTR-3B are for the Indian supplier selling out.

A nil return is required for months with no supplies.

How do OIDAR services under RCM work?

When the Indian recipient of OIDAR is a registered business rather than an NTOR, the tax shifts to the recipient under reverse charge.

This is how OIDAR services under RCM operate: the Indian business self-assesses and pays the GST on the imported service, then claims input tax credit where eligible.

That is why a registered Indian SaaS firm buying a foreign cloud tool accounts for GST itself, instead of the foreign vendor registering for that supply.

The reverse-charge liability sits alongside any withholding tax obligation on the payment abroad, which is a separate income-tax question that a CA handles on the TDS side.

The split is worth stating plainly, because it decides who carries the paperwork:

• Recipient is an unregistered consumer (NTOR): The foreign supplier registers, charges GST and files GSTR-5A.
• Recipient is a registered business: The Indian business pays GST under reverse charge and claims input tax credit where eligible.

Under RCM the cash effect is often neutral for a registered buyer, because the GST paid becomes credit the same month.

The value of getting it right is compliance, not cost: an unreported reverse-charge liability can surface in a later audit with interest, even though the underlying tax would have been creditable.

For example, a GST-registered Indian agency paying a US design tool ₹1,00,000 a year pays ₹18,000 IGST itself under reverse charge and can claim it back as input tax credit if it uses the tool for taxable supplies. A registered business that makes only exempt supplies still pays this reverse charge, but cannot claim the credit, so the 18% becomes a real cost.

What happens if a foreign supplier does not register for OIDAR?

Non-registration does not remove the liability; it converts it into a default.

A foreign OIDAR supplier that should have registered but did not remains liable for the GST that ought to have been collected, together with interest and applicable penalties for the period of default.

The practical risk has grown since the scope widened, because more suppliers now fall inside the net and payment-trail data makes the Indian nexus easier to establish.

Many global platforms therefore register proactively and build the 18% into their India pricing rather than absorb a later demand. For an Indian consumer, the visible sign is simply GST appearing on the invoice from an overseas app or subscription.

A supplier that should have registered remains liable for the unpaid GST with interest, and can face penalties and recovery action, including through payment intermediaries in India.

Worked examples: OIDAR in real businesses

Rules land better with names and numbers. Here are four short scenarios that cover the common shapes of an OIDAR supply.

A US SaaS selling to Indian consumers

Meridian Notes is a US-based note-taking app with no Indian entity. It sells a ₹499-a-month plan directly to individual users across India, who are unregistered consumers and therefore non-taxable online recipients.

• Meridian must register in India under the simplified route in Form GST REG-10 from its first Indian sale.
• GST at 18% applies: ₹499 × 18% = ₹89.82 per subscription.
• The buyer pays ₹588.82, of which Meridian remits ₹89.82 to the government.
• Every month, Meridian files GSTR-5A by the 20th, reporting these supplies and paying the collected tax.

Meridian's finance lead builds the 18% into the India price shown at checkout, so the customer sees a GST-inclusive figure and Meridian never has to chase the tax after the fact.

An Indian business buying a foreign design tool

Priya runs a six-person design studio in Pune billing US clients. She subscribes her team to a foreign cloud design tool for business use, and her studio is registered under GST.

Because Priya's studio is a registered business, this is an OIDAR supply under RCM. The foreign vendor does not register or charge Indian GST on her plan.

Instead, Priya's accountant self-assesses 18% GST on the imported service under reverse charge, pays it, and claims the input tax credit in the same period. The net cash cost is nil, but the entry must appear in her returns.

Her accountant also checks any TDS on the outbound payment as a separate income-tax step.

An OTT streaming platform

An OTT platform headquartered in Singapore streams films and shows to viewers across India for ₹149 a month. Its buyers are individual viewers, so they are NTORs, and streaming is a textbook OIDAR supply.

The platform uses the 2-of-7 test to place each viewer in India, typically matching an Indian billing address with an Indian-issued card. It registers, charges 18% on the ₹149 plan, and files GSTR-5A monthly.

When a corporate buyer signs up for a business account and shares a GSTIN, the platform stops charging GST on that account and lets the company handle reverse charge instead.

An e-learning seller with recorded courses

An Australian e-learning seller offers pre-recorded, self-paced coding courses to Indian learners for ₹2,000 each. Because the courses are automated and delivered on demand, they are OIDAR, even though a human once recorded them.

The seller registers under the simplified route and charges 18%, so a course sells for ₹2,360 with ₹360 remitted through GSTR-5A.

If the same seller ran live, one-to-one tutoring in real time, that live element would need separate review, because the 2023 definition no longer excludes services just because a person is involved, because a person delivers it as it happens.

The same brand can therefore run one product inside OIDAR and another outside it, which is why product design and tax treatment need to be checked together.

How Xflow fits for Indian digital exporters

Xflow does not file your GST returns and is not a tax or CA service. Where it helps is the payment leg.

If you are an Indian SaaS, GCC or ITeS business exporting digital services, your sales overseas are treated as export of services under GST, which is a zero rated supply under gst rather than an OIDAR inbound supply.

To claim the zero-rated benefit and satisfy FEMA, you need clean proof that the export proceeds came into India.

Xflow converts export payments at the live mid-market rate and issues an eFIRA for every payment, so your reconciliation and your accountant's paperwork line up.

That matters because the same transaction may also involve an HSN code on the invoice and a purpose code on the remittance, and mismatched records are exactly what slows a GST refund.

OIDAR vs export of services: what is the difference?

OIDAR vs export of services is the pair people confuse most, because both involve digital services crossing a border. The direction is what separates them.

Read the table left to right and the logic is consistent: OIDAR taxes money coming in to an Indian buyer, while export of services relieves money coming in to an Indian seller.

If you are an Indian exporter, you almost always sit in the right-hand column, and your job is to protect the zero-rating with clean proof of remittance rather than to worry about OIDAR registration at all.

The bottom line

OIDAR taxes digital services delivered through information technology at the recipient's location, so foreign suppliers to Indian consumers must register and file GSTR-5A, while registered Indian buyers handle GST under reverse charge.

If you are the Indian exporter instead, your supply is zero-rated, and clean eFIRA on your inward payments keeps that benefit intact.

Frequently asked questions