Why Foreign CRM Platforms Reassess OIDAR Liability GST 2023-24?

Overview

If you operate a foreign CRM or SaaS platform, you may have earlier assumed that Indian GST laws did not apply to your services. However, recent GST clarifications have expanded the scope of OIDAR, bringing many such digital platforms under Indian tax regulations. This shift makes it important for foreign CRM providers to reassess their GST exposure without delay and understand their compliance obligations.

In this overview, we at Ebizfiling explain how the 2023–24 GST clarifications impact foreign CRM platforms, what qualifies as OIDAR, and why timely GST registration and compliance are critical to avoid future tax risks.

What Changed in GST Law in 2023-24 ?

The definition of Online Information Database Access and Retrieval (OIDAR) services has been amended to remove the earlier requirement that such services must be essentially automated and involve minimal human intervention. As a result, almost any digital service delivered over the internet, even if it includes human interaction, support, or customization, may now qualify as OIDAR. Additionally, the definition of a non-taxable online recipient has been broadened, meaning that any unregistered person or small business in India receiving OIDAR Services from abroad is now subject to tax. Exemptions that previously applied to individuals or non-commercial use were removed effective on 1 October 2023.

Implication: If you are a foreign CRM platform with Indian clients  even for cloud-based CRM, project management, or collaboration tools  you must reassess whether you need to comply under OIDAR after these gst clarifications.

Why Many Foreign CRM Platforms Are Affected?

What qualifies as OIDAR now ?

Cloud-based CRM systems, project-management SaaS platforms, database tools, and online collaboration solutions now all fall under the revised definition of OIDAR. Previously, many CRM and SaaS providers assumed that the presence of human involvement such as onboarding, support, or customization kept them outside the OIDAR category. Under the updated rules, this assumption no longer applies. If any component of the service is delivered online, including login access, updates, hosting, data storage, or even support, the service is considered to be mediated through information technology and therefore qualifies as OIDAR.

No turnover threshold for foreign suppliers  

For foreign service providers offering OIDAR services to Indian recipients, there is no minimum revenue or turnover requirement for GST registration, and even a single Indian client creates liability. As a result, many small-scale CRM and SaaS firms that only occasionally acquired customers in India may now be non-compliant without realizing it.

Broad definition of Indian recipient  

The revised GST rules define a non-taxable online recipient as any unregistered person in India receiving services, including individuals, small businesses, freelancers, or any entity without a GSTIN. This means that even if the Indian user is a small firm or freelancer without GST registration, the foreign supplier must still treat them as a taxable recipient.

What are the Risks of Non-Compliance?

Since the gst clarifications, compliance enforcement has increased significantly:

• The Directorate General of GST Intelligence (DGGI) has launched enforcement actions and issued notices to multiple foreign digital service providers it identified as non-compliant under expanded OIDAR rules.

• These actions include back-tax demands, interest, and possible disruption or blocking of services/payment gateways for suppliers not registered under GST.

• Given the broad redefinition, many CRM platforms that thought they were safe are now exposed.

What Foreign CRM Platforms Should Do Immediately?

Here’s a practical action plan for foreign CRM platforms:

How Ebizfiling Helps Foreign CRM Platforms Navigate Post-2023 OIDAR Rule?

At Ebizfiling, we work with foreign CRM and SaaS businesses to manage their OIDAR liability and ensure full GST compliance:

• We review your business model and user base to assess OIDAR exposure.

• We help you register under GST if required, even without a local Indian office.

• We act as your authorized Indian representative for compliance purposes.

• We manage invoicing, tax collection, monthly return filing (GSTR-5A) and tax remittance.

• We maintain records and ensure documentation meets Indian GST audit standards.

• We monitor legal updates to keep you ahead whenever GST rules change.

With Ebizfiling, you stay focused on product and growth we handle the Indian compliance burden.

Conclusion  

The 2023-24 gst clarifications have changed the game for foreign CRM platforms. Cloud-based tools, SaaS, and online collaboration platforms that once considered themselves outside Indian tax law now likely fall under OIDAR. Ignoring this shift risks serious tax liability and business disruption. If you have Indian users, the time to re-assess your GST compliance is now and Ebizfiling is ready to help you navigate this new landscape smoothly.

Suggested Read :

Balancing OIDAR GST Compliance with Digital Privacy Laws

OIDAR Compliance Roadmap for Foreign Startups 

Zero-Office Startups Abroad Serving Indian Clients

Why User Location Matters for OIDAR India?

Do Digital Nomads Abroad Trigger OIDAR for India?

Frequently Asked Questions on OIDAR GST Clarifications