How One Paid Subscription Can Trigger OIDAR Registration?

Introduction

OIDAR registration is one of the most overlooked compliance requirements for foreign digital service providers. At Ebizfiling, we regularly work with SaaS companies, e-learning platforms, and content service providers who realise—often too late—that even a single paid Indian user can trigger GST obligations. This article explains why that happens, how the Indian User Test works, and what foreign businesses must do to stay compliant under Indian GST law.

What Are OIDAR Services and Who Must Register? 

OIDAR services refer to Online Information and Database Access or Retrieval services. These are services delivered over the internet without physical interaction. They include:

• SaaS tools used for project or workflow management

• Cloud-based storage and design systems

• Online learning modules and digital course platforms

• Video, audio, and content streaming solutions

• Paid digital downloads or interactive online utilities

Foreign providers offering OIDAR services to Indian individuals or unregistered entities must register under GST. This requirement applies from the very first paid subscription.

Why One Indian User Subscription Triggers OIDAR Registration?

Indian GST law does not offer any exemption threshold for foreign digital service providers. This means:

• One paid subscription from an Indian user mandates GST registration

• IGST at 18 percent must be charged on every such transaction

• The provider must file monthly GSTR‑5A returns

• Registration is done through Form GST REG‑10

The rule ensures equal tax treatment between Indian and foreign digital businesses.

How the Indian User Test Determines GST Liability?

The Indian User Test helps identify whether the customer is located in India. A customer is classified as an Indian recipient if any two of these indicators match:

• Billing address provided during purchase is in India

• Payment card used is issued in India

• Bank account used belongs to an Indian financial institution

• IP address of the device traces back to India

• SIM card or phone number has an Indian country code

If the user is not registered under GST and satisfies two or more of these conditions, OIDAR registration becomes mandatory for the foreign provider.  

What Happens if a Foreign Provider Does Not Register? 

Non-compliance exposes businesses to:

• Pending GST on all Indian transactions

• Interest and penalties on delayed payments

• Official notices from Indian tax authorities

• Possible service restrictions for Indian users

Foreign providers risk long-term compliance issues if they continue offering services without meeting OIDAR obligations.

Example Scenarios Where OIDAR Applies  

OIDAR Compliance Checklist for Foreign Digital Providers   

• Identify whether any current users are located in India

• Review billing, IP, and payment details for Indian indicators

• Confirm if users are GST‑registered or unregistered

• Apply for OIDAR registration using Form GST REG‑10

• Charge IGST at 18 percent on B2C transactions

• File GSTR‑5A every month

• Maintain transaction-wise records for audits

Appoint an Indian representative if you have no physical presence in India (mandatory as per IGST Act).

How Ebizfiling Supports OIDAR Registration?

We assist foreign service providers with every stage of compliance:

• Document collection and applicability evaluation

• GST REG‑10 filing and registration tracking

• Assistance in appointing an authorized Indian representative

• Monthly GSTR‑5A filing and compliance monitoring

• Dedicated support team for prompt response and updates

Conclusion 

A single Indian user subscription can enforce OIDAR registration for any foreign digital service provider. The law is clear, and the compliance requirement is immediate. Ebizfiling helps businesses navigate the process smoothly, ensuring accurate registration, timely filing, and complete adherence to Indian GST rules.

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?

Do Digital Nomads Abroad Trigger OIDAR for India?

Frequently Asked Questions on Single User OIDAR Registration