OIDAR Impact on VR AR Apps Offering Digital Experiences to Indian Users
Introduction
The world of Virtual and Augmented Reality (VR/AR) is opening a powerful new frontier for entertainment, education, and gaming among Indian users. However, as your VR or AR app reaches this fast-growing market, it also enters a critical compliance zone under India’s GST laws, especially the OIDAR framework. Digitally delivered VR/AR experiences are closely examined under OIDAR rules, making GST compliance unavoidable for foreign service providers.
At Ebizfiling, we understand that VR/AR services offered online are treated as OIDAR services under GST. This directly impacts pricing, invoicing, and reporting obligations. Foreign companies supplying paid VR/AR services to unregistered Indian users must obtain GST registration, charge applicable tax, and file monthly returns from the very first transaction. This article explains everything VR/AR businesses need to know to stay fully compliant with OIDAR GST requirements in India.
What are VR AR Apps under OIDAR?
Virtual and augmented reality apps that stream or deliver automated digital experiences to Indian users meet India’s OIDAR definition.
Examples of OIDAR-compliant VR AR services:
-
VR games purchased and downloaded by Indian users
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AR-based educational apps with paid upgrades or subscriptions
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Virtual experiences like 360° tourism or fitness classes
If your service is delivered online without human interaction and consumed in India, it’s considered an OIDAR supply.
How India Taxes Foreign VR AR App Sales?
India levies 18% Integrated GST (IGST) on digital services provided by foreign entities to Indian consumers.
Key GST compliance rules:
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No threshold: GST applies from the first rupee of B2C sale
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B2B buyers pay tax under reverse charge; B2C sellers must register under OIDAR
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Place of supply is determined by user’s billing address, IP, or payment method
You must obtain an Indian GSTIN via Form GST REG-10 before you start.
What to Know About Platforms Like Meta or Apple?
If your VR AR app is sold through app stores or VR platforms:
-
Apple App Store and Google Play usually collect and remit GST
-
Meta (Oculus/Quest) also includes Indian GST in pricing
If you use these platforms exclusively, you may not need to register. But for any direct sales, you are liable.
GSTR-5A and Monthly Compliance for Foreign VR AR Apps
Once registered, you must file GSTR-5A by the 20th of every month. It includes:
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Total sales to Indian consumers
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GST collected
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Currency conversion details
You must pay GST in INR via the GST portal. Ebizfiling can automate this process for you.
Direct vs Platform Sales: Tax Impact
|
Type of Sale |
GST Responsibility |
|
Via Meta/Apple Store |
Platform remits GST |
|
Direct from website |
You must collect & file |
Platforms help simplify compliance, but if you sell directly, you need your own GSTIN.
How Ebizfiling Helps Foreign VR AR App Startups?
We help global founders launch compliantly in India. Our OIDAR service for VR/AR developers includes:
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Confirming whether your virtual reality apps fall under OIDAR
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Completing GST REG-10 registration for foreign suppliers
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Acting as your local GST representative if needed
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Monthly filing of GSTR-5A and payment calculation
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Support with record-keeping and customer invoice formats
With Ebizfiling, your India expansion stays legally clean, fully digital, and fully compliant.
Lastly,
VR AR apps are growing fast in India. If you deliver paid digital experiences to Indian users, OIDAR GST rules apply. With early registration and monthly compliance, you can operate smoothly. Ebizfiling simplifies this for foreign startups entering the Indian market.
Suggested Read :
Balancing OIDAR GST Compliance with Digital Privacy Laws
OIDAR Compliance Roadmap for Foreign Startups
Why Foreign CRM Platforms Reassess OIDAR Liability GST 2023-24?
Why User Location Matters for OIDAR India?
Do Digital Nomads Abroad Trigger OIDAR for India?
Frequently Asked Questions on OIDAR for VR AR Apps
1. Do VR AR apps fall under OIDAR in India?
Yes. VR AR apps that deliver digital services to Indian users online, such as virtual games or AR learning tools, fall under OIDAR as defined under Indian GST law because they are automated and delivered without physical presence.
2. What is the GST rate for virtual reality apps?
Virtual reality apps classified as OIDAR services attract 18% Integrated GST (IGST) when supplied to Indian consumers by foreign service providers.
3. Do I need GST registration if I use the Meta Quest or Apple store?
If platforms like Meta Quest or Apple collect and remit GST on your behalf, separate registration may not be required. However, for direct sales outside such platforms, OIDAR GST registration becomes mandatory.
4. How can a foreign VR app provider register for GST?
Foreign VR app providers must apply through Form GST REG-10 on the GST portal. The process requires service details, business documents, and appointment of an authorized Indian representative if there is no local presence.
5. What is GSTR-5A?
GSTR-5A is the monthly GST return required to be filed by OIDAR service providers. It reports services supplied to Indian users and the GST paid, and must be filed by the 20th of every month.
6. Is there any minimum turnover limit for OIDAR GST registration?
No. OIDAR services do not enjoy any turnover threshold. Even a single sale to a non-GST registered Indian customer makes GST registration compulsory.
7. Can GSTR-5A be filed without professional help?
Yes, GSTR-5A can be filed directly on the GST portal. However, due to strict timelines and reporting requirements, many foreign startups prefer professional compliance support.
8. Can Ebizfiling act as an India representative?
Yes. Ebizfiling can act as your authorized representative in India and manage OIDAR registration, monthly GST filings, and compliance communication with authorities.
9. Are B2B sales through AR tools also taxable?
If the Indian customer is GST registered and provides a valid GSTIN, GST is paid under the reverse charge mechanism. GST collection by the foreign provider applies only to B2C supplies.
10. Does OIDAR GST registration create income tax liability in India?
No. OIDAR GST registration does not create income tax liability or a permanent establishment in India. It only requires compliance with indirect tax obligations unless a physical presence is established.
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