Why global productivity apps are OIDAR services in GST?
Introduction
Stop Leaving Money on the Table! If your global SaaS business delivers automated global productivity apps to India, you’re sitting on a GST compliance time bomb. Why? Because these are classified as digital services under GST, specifically triggering the OIDAR rules. Don’t panic—this simple breakdown of OIDAR services will secure your standing, streamline your payments, and show foreign providers exactly how to master India’s GST and compliance.
Understanding OIDAR Under GST
OIDAR refers to Online Information and Database Access or Retrieval Services. These services are delivered over the internet and rely on automated or electronic processes. The purpose of this classification is to bring digital imports into the Indian tax system, ensuring parity with domestic digital service providers.
Why Global Productivity Apps Come Under OIDAR?
Popular global productivity apps such as Notion, Trello, Airtable, Asana, Zapier, and Monday.com fall under OIDAR because:
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They operate digitally without physical goods.
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The user accesses all features online.
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Delivery and functionality are automated.
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Services are subscription-based and internet-dependent.
Under GST rules, such platforms qualify as digital services under GST.
OIDAR Rule Expansion After the 2023 Amendment
The Finance Act, 2023 significantly broadened the scope of OIDAR. Earlier, the requirement of “minimal human intervention” created ambiguity. This clause has now been removed.
As a result:
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Any online service supplied by a foreign entity to an unregistered Indian user is OIDAR.
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Online coaching, courses, communities, SaaS tools, workflow apps, and streaming services are all covered.
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Almost all internet-delivered paid services consumed by individuals attract GST.
This change ensures that most digital services used in India fall under GST compliance.
GST Compliance Requirements for Foreign SaaS Companies
Mandatory GST Registration
Foreign SaaS providers must register for GST if:
Even one unregistered Indian customer pays for the service and t here is no turnover limit for foreign OIDAR suppliers.
Compliance After Registration (Handled by EbizFiling)
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Charging 18% IGST to B2C Indian users
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Monthly filing of GSTR-5A
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Depositing tax to the Indian government
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Maintaining proper transaction records
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End-to-end GST compliance and advisory
EbizFiling assists foreign businesses with complete registration, filing, and compliance support.
B2B vs B2C GST Treatment for OIDAR
|
Customer Type |
GST Applicability |
Who Pays Tax? |
|
B2C (No GSTIN) |
18% IGST |
Foreign SaaS provider |
|
B2B (With GSTIN) |
No GST charged |
Indian business via Reverse Charge |
Example
If an Indian freelancer without GSTIN purchases a Zapier plan:
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Zapier must charge 18% GST and file GSTR-5A through its GST registration.
If a GST-registered business buys the same plan:
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Zapier does not charge GST.
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The Indian business pays IGST via reverse charge.
EbizFiling assists global SaaS companies in implementing the correct tax structure based on customer type.
Why Automated Workflow Apps Qualify as OIDAR?
Automated workflow apps such as Notion, Zapier, Asana, Monday.com, Airtable, and Trello clearly fall under the OIDAR category because their delivery is entirely digital, requires no physical product, and operates solely through online access. Users interact with these platforms over the internet, and every feature, whether task management, automation, integration, or workflow execution, is powered by software rather than physical or manual processes. Since the service is provided online, consumed online, and delivered digitally from a foreign location, these workflow tools meet all the criteria of digital services under GST, making them fully taxable as OIDAR when supplied to Indian users.
Penalties for Non-Compliance Under GST
Foreign SaaS providers may face:
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Interest payable on delayed tax payments
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Penalties for non-registration
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Penalties for wrong or missed filings
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Regulatory notices from Indian authorities
EbizFiling ensures timely compliance to help avoid such risks.
How EbizFiling Supports Foreign SaaS Providers?
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Assists foreign SaaS companies in identifying OIDAR applicability and GST liability for Indian users.
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Handles complete GST registration for Non-Resident OIDAR Suppliers without requiring an office in India.
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Guides on correctly charging 18% IGST to B2C users and configuring compliant invoicing.
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Helps classify B2B vs B2C customers to apply the reverse charge mechanism accurately.
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Manages monthly GSTR-5A filing, tax payments, and timely compliance reminders.
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Provides ongoing advisory and support for responding to GST notices and law updates.
In short ,
Global productivity apps are categorically treated as OIDAR services when used in India. To operate smoothly and legally, foreign SaaS companies must comply with GST registration, tax collection, and GSTR-5A filing rules. EbizFiling offers complete compliance management for OIDAR suppliers to simplify operations and avoid penalties.
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 GST for Foreign SaaS Companies
1. Do global productivity apps require GST registration in India?
Yes. Any foreign productivity app offering paid subscriptions to even a single unregistered individual in India must register under GST as an OIDAR service provider. There is no turnover threshold for foreign suppliers.
2. What is the GST rate applicable to OIDAR services?
OIDAR services attract 18% IGST, which must be charged to B2C customers in India. This tax is collected and deposited by the foreign SaaS provider through GSTR-5A.
3. Does EbizFiling help foreign SaaS companies register under GST?
Yes. EbizFiling provides complete assistance with GST registration for OIDAR suppliers, including documentation, advisory, and compliance setup for foreign SaaS companies.
4. What is GSTR-5A?
GSTR-5A is a mandatory monthly GST return filed by foreign OIDAR service providers. It reports all taxable supplies made to Indian customers and the IGST collected from B2C users.
5. Do B2B users need to pay GST themselves?
Yes. When the buyer has a valid GSTIN, the foreign provider does not charge GST. Instead, the Indian business must pay IGST under the Reverse Charge Mechanism (RCM).
6. Does a foreign company need a physical office in India for GST registration?
No. Foreign SaaS companies do not require an Indian office. They can register as a Non-Resident OIDAR Supplier, and all compliance can be fully managed remotely.
7. What changed after the 2023 OIDAR amendment?
The amendment removed the “minimal human intervention” requirement. Now, any online service, automated or not, qualifies as OIDAR when delivered by a foreign provider to unregistered Indian users.
8. Do AI-based SaaS tools come under OIDAR?
Yes. Whether automated, AI-driven, or partially manual, all digital services delivered online fall within the OIDAR category and attract GST when consumed by Indian individuals.
9. Does GST apply to free plans?
No. GST applies only when consideration (payment) is received. Free plans, trials, or demo versions do not attract GST unless they convert into paid subscriptions.
10. Can EbizFiling handle monthly GST filings for foreign SaaS companies?
Yes. EbizFiling manages complete monthly compliance for foreign SaaS providers, including GSTR-5A filing, tax payments, documentation, and ongoing advisory support.
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