Do Digital Nomads Abroad Trigger OIDAR for India?

Introduction

Many digital nomads sell online services while living outside India. However, when these services are accessed by users located in India, Indian tax rules may apply. At Ebizfiling, we help digital nomads understand how OIDAR provisions work and when they trigger GST liability in India. This article explains the rules in simple terms so you can stay compliant without confusion.

What Is OIDAR and Why It Matters to Digital Nomads?

OIDAR means online information and database access or retrieval services. It includes automated digital or cloud-based services delivered through the internet. The Goods and Services Tax Council defines OIDAR as any service supplied online with minimal human involvement. Examples include SaaS tools, streaming access, automated design tools subscription-based content, data storage, or similar online services.

Many digital nomads run these models while living abroad. When an Indian user buys or accesses these services, GST rules may apply. The location of the seller does not change this. The place of supply becomes India when the user is in India and is not registered under GST. After October 1, 2023, the rules expanded. Services from any foreign OIDAR provider to an unregistered user in India fall under IGST. This includes individuals and entities that are not GST registered, such as consumers and many small organizations.

This update created a new responsibility for digital nomads selling online services from outside India.

When Do Digital Nomads Trigger OIDAR Liability?

You may fall under OIDAR if:

1. You live abroad and supply automated online services.

2. Your customer is in India and not registered under GST.

3. The service does not involve major human input.

If these conditions apply, you may need to register as a Non Resident Online Service Provider under GST. You must collect and pay IGST and file GSTR 5A every month. However, if your customer is a GST registered business, the liability may shift to them through the reverse charge mechanism. Not all online services qualify as OIDAR. Services that require personal involvement, consulting, or customized work do not fall under this category.

Ebizfiling guides digital nomads through this classification so they do not misinterpret the rules.

Why These Rules Impact Digital Nomads in 2024 and Beyond?

Millions of Indian users buy online products from global creators and nomads. This inflow led the government to update GST rules to prevent revenue leakage. The October 2023 update tightened compliance for all foreign suppliers. Digital nomads now need to evaluate whether they fall under the foreign OIDAR category and whether Indian users form part of their customer base.

How Ebizfiling Helps Digital Nomads?

• We review your online services and confirm whether they qualify as OIDAR.

• We assess your user base and identify Indian recipients.

• We guide you on whether OIDAR registration is mandatory.

• We complete the Non Resident OIDAR registration process for you.

• We file monthly GSTR 5A returns on your behalf and manage tax payments.

• We keep you updated on all OIDAR based changes so you stay compliant.

Conclusion  

Digital nomads selling online services often assume that living abroad means no Indian tax exposure. But OIDAR rules apply based on the user’s location. If you offer automated digital services and Indian users access them, you may trigger compliance. Ebizfiling helps digital nomads stay compliant and understand OIDAR in a clear and simple way.

Suggested Read :

Balancing OIDAR GST Compliance with Digital Privacy Laws

OIDAR Compliance Roadmap for Foreign Startups 

GST Registration for OIDAR Service Providers in India

Why User Location Matters for OIDAR India?

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