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.
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.
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.
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.
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.
|
Service Category |
Type of Indian User |
OIDAR GST Triggered? |
|
E‑learning platform |
Student |
Yes |
|
Cloud-based SaaS |
Freelancer |
Yes |
|
Subscription media |
Individual |
Yes |
|
Storage tool |
Private Limited Company |
No (Reverse charge) |
|
Productivity suite |
GST‑registered business |
No (Reverse charge) |
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).
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
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.
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An OIDAR service is any digital service delivered over the internet that users can access online without physical interaction. This includes streaming platforms, SaaS tools, cloud storage, online courses, e-books, and similar digital services.
Yes, even a single paid subscription from an Indian user makes OIDAR registration mandatory for a foreign service provider because there is no turnover threshold under Indian GST.
OIDAR services are subject to IGST at the rate of 18 percent, which the foreign provider must collect and pay on every B2C sale to Indian users.
The Indian User Test checks indicators such as billing address, payment instrument details, IP location, and SIM country code. If any two indicators show the user is located in India, GST liability applies.
No, foreign OIDAR providers do not receive any turnover exemption. Registration becomes compulsory from the very first rupee earned from Indian users.
Not always. If the Indian customer is GST registered, GST is generally paid under the reverse charge mechanism, and the foreign provider may not need to register.
Foreign digital service providers must apply for OIDAR registration using Form GST REG-10 on the GST portal to obtain an OIDAR GSTIN.
Every registered OIDAR supplier is required to file Form GSTR-5A each month, reporting all taxable supplies made to Indian users and the GST paid.
Failure to register can result in tax demands, interest, penalties, and in serious cases, restrictions on offering digital services to Indian users.
Ebizfiling supports foreign businesses with OIDAR registration, GST documentation, monthly GSTR-5A filings, and complete compliance management so they can serve Indian users without legal risk.
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