GSTR-5A Explained: What It Is and Why It Matters?

Introduction

When people hear the word GST, they usually assume it applies only to Indian businesses. Many foreign companies believe that if they are not registered in India or do not have a physical presence here, GST does not concern them. This misunderstanding often leads to compliance issues later. This is where GSTR-5A comes into the picture.

GSTR-5A is a special GST return that applies specifically to foreign online service providers supplying digital services to customers in India under the OIDAR framework. At Ebizfiling, we regularly assist foreign businesses that offer digital services to Indian users. Most of them approach us after hearing about GSTR-5A for the first time, often through a notice or compliance reminder.

If you are unfamiliar with this return, do not worry. By the end of this blog, you will clearly understand what GSTR-5A is, who needs to file it, and why it matters.

What exactly is GSTR-5A?

GSTR-5A is a monthly GST return that must be filed by foreign companies providing online services to customers in India. These online services fall under a category called OIDAR, which stands for Online Information and Database Access or Retrieval services.

In simple words, OIDAR services are services that are delivered through the internet, are automated, and require very little or no human involvement. If your business provides digital services to Indian users from outside India, GSTR-5A is the return through which GST is reported and paid.

Who needs to file GSTR-5A?

GSTR-5A does not apply to everyone. It is meant for a specific group of businesses.

You are required to file GSTR-5A if:

• Your business is located outside India
• You supply online or digital services
• Your customers are based in India
• Your customers are not registered under GST

Indian companies and regular GST-registered businesses do not file this return. It is strictly meant for foreign OIDAR service providers.

What are OIDAR services under GST?

OIDAR services are digital services that are delivered online and work automatically once a customer subscribes or pays.

Some common examples include:

• Video or music streaming platforms
• SaaS products and cloud-based software
• Online advertising platforms
• E-learning portals and online courses
• E-books, online journals, and digital databases

If the service is accessed online and delivered without human intervention, it usually qualifies as an OIDAR service.

Why does India charge GST on foreign companies?

This is a very common question. The logic behind GST on OIDAR services is simple. The service is consumed in India, so tax is charged in India. Earlier, many foreign platforms provided services to Indian users without paying GST.

To close this gap, Indian GST law introduced special provisions for OIDAR services. GSTR-5A is the mechanism through which the government ensures GST is collected from foreign service providers supplying digital services in India.

What details are reported in GSTR-5A?

GSTR-5A is much simpler compared to other GST returns filed by Indian businesses.

It mainly includes:

• Total value of online services supplied to Indian users
• GST collected on those services
• Tax payable for the month
• Details of tax paid

There is no requirement to report purchases or expenses. There is also no concept of input tax credit under GSTR-5A.

How often is GSTR-5A filed and what is the due date?

GSTR-5A is filed every month. The due date is the 20th day of the following month. For example, services provided in April must be reported by 20th May.
Even if there are no sales in a particular month, a Nil return must still be filed. Skipping filing because there was no activity is a common mistake and can still lead to penalties.

How is GST paid under GSTR-5A?

GST under GSTR-5A is paid:

• Only through cash
• In Indian Rupees
• Directly through the GST portal

The applicable GST rate for OIDAR services is generally 18 percent. Input tax credit is not allowed, which means the entire GST collected from customers must be paid to the government.

What happens if GSTR-5A is not filed?

Ignoring GSTR-5A can create serious compliance issues over time.

Non-filing or delayed filing may result in:

• Late fees and interest
• GST notices from authorities
• Suspension or cancellation of GST registration
• Difficulty in continuing services for Indian users

Many foreign companies only realize the importance of GSTR-5A after receiving compliance notices, which can easily be avoided with timely filing.

A simple real-life example

Let us take a simple example.

A UK-based online learning platform sells monthly subscriptions to Indian students. These students are individuals and are not registered under GST.

In this case:

• The platform must register under OIDAR GST
• Charge 18 percent GST on subscription fees
• File GSTR-5A every month
• Pay the collected GST to the Indian government

Even though the company operates outside India, GST compliance is still mandatory.

How Ebizfiling helps with GSTR-5A compliance?

At Ebizfiling, we help foreign businesses understand and manage their GST responsibilities in India. Our support includes:

• OIDAR GST registration
• Monthly GSTR-5A filing
• GST payment assistance
• Compliance tracking and reminders

We focus on explaining requirements in simple terms so businesses can stay compliant without confusion or stress.

Conclusion

GSTR-5A may sound complex at first, especially if you are new to Indian tax laws. However, the concept is straightforward. If you provide online services to Indian users from outside India, GST applies, and GSTR-5A is how you report and pay it.

Understanding this early helps foreign businesses avoid penalties and ensures smooth operations in the Indian market.

Frequently Asked Questions on GSTR-5A