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.
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.
GSTR-5A does not apply to everyone. It is meant for a specific group of businesses.
You are required to file GSTR-5A if:
Indian companies and regular GST-registered businesses do not file this return. It is strictly meant for foreign OIDAR service providers.
OIDAR services are digital services that are delivered online and work automatically once a customer subscribes or pays.
Some common examples include:
If the service is accessed online and delivered without human intervention, it usually qualifies as an OIDAR service.
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.
GSTR-5A is much simpler compared to other GST returns filed by Indian businesses.
It mainly includes:
There is no requirement to report purchases or expenses. There is also no concept of input tax credit under GSTR-5A.
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.
GST under GSTR-5A is paid:
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.
Ignoring GSTR-5A can create serious compliance issues over time.
Non-filing or delayed filing may result in:
Many foreign companies only realize the importance of GSTR-5A after receiving compliance notices, which can easily be avoided with timely filing.
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:
Even though the company operates outside India, GST compliance is still mandatory.
At Ebizfiling, we help foreign businesses understand and manage their GST responsibilities in India. Our support includes:
We focus on explaining requirements in simple terms so businesses can stay compliant without confusion or stress.
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.
Yes. If you are located outside India but provide online services to customers in India, GST law still applies. Since the service is consumed in India, you are required to obtain OIDAR GST registration and file GSTR-5A every month.
GSTR-5A mainly applies when Indian customers are not registered under GST. If you provide online services to individual users in India, you are responsible for collecting GST and filing GSTR-5A.
Yes. GSTR-5A must be filed every month even if there were no transactions. In such cases, a Nil return is required. Not filing due to no activity can still attract late fees and compliance notices.
No. Input tax credit is not allowed under GSTR-5A. The GST collected from Indian customers must be paid fully in cash without any adjustment.
The standard GST rate applicable to OIDAR services is 18 percent. This rate is charged on the value of online services provided to Indian users.
Late or non-filing of GSTR-5A can lead to late fees, interest on unpaid tax, and notices from the GST department. Continuous non-compliance may also result in suspension or cancellation of GST registration.
No. Once GSTR-5A is filed, it cannot be revised. Any corrections must be adjusted in the return filed for the subsequent month.
In certain cases, the intermediary or platform facilitating the OIDAR service may be responsible for GST compliance. The responsibility depends on who controls billing and service delivery and should be reviewed carefully.
GST under GSTR-5A must be paid in Indian Rupees through the GST portal, even if your business operates and earns revenue in a foreign currency.
Yes. OIDAR GST registration is mandatory before filing GSTR-5A. Registration is the first step before starting monthly compliance and tax payments in India.
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