Place of Supply for OIDAR

In this article, we explain what OIDAR (Online Information, Database Access, and Retrieval) services are and detail how to determine the place of supply for such services under GST. While Budget 2023 introduced several important updates, there have been no major further amendments specifically targeting OIDAR services after 2023. Below is a summary of the current framework and key considerations.

What Is an OIDAR Service?

For a service to qualify as OIDAR, it must meet both of these conditions:

• Delivery is mediated through the internet.
• The supply is impossible without information technology.

Examples of OIDAR Services

Common examples include:

• Online advertising
• Cloud services (e.g., Google Drive)
• Provision of e-books, movies, music, software, and other intangibles (e.g., Hotstar, Amazon Prime Video)
• Access to data or information in electronic form
• Online gaming (e.g., Steam)

Note: Merely using the internet for communication or facilitation does not classify a service as OIDAR.

Non-OIDAR Services

Services that do not qualify as OIDAR include:

• Supplies of goods with electronic ordering and processing
• Physical books, newspapers, or journals
• Professional services provided via email (e.g., legal or financial consulting)
• Booking services for events, hotels, or car rentals
• Educational courses delivered online by a teacher
• Offline repair services for computer equipment
• Traditional advertising in print or broadcast media

Applicability of GST for OIDAR Services

The taxability and charge mechanism for OIDAR services depend on the locations of the service supplier and the recipient. The following table summarizes common scenarios:

Location of Supplier	Location of Recipient	Taxability	Charge Type	Examples
India	India (Recipient: Registered)	Yes	Forward Charge	Hotstar – GST payable by the user
Outside India	India (Recipient: Registered)	Yes	Reverse Charge (RCM)	US-based web hosting services
Outside India	India (Recipient: Non-Taxable)	Yes	Forward Charge	Netflix – IGST payable by the supplier
India	Outside India	No	N/A	Hotstar for foreign users (export of service)
Outside India	Outside India	No	N/A	Streaming services within the supplier’s country

Determining the Place of Supply for OIDAR

For the supply of online information, database access, or retrieval services, the place of supply is determined based on the location of the recipient.

Supply	Recipient	Place of Supply
OIDAR Services	Any person	Location of the recipient

How to Determine the Location of the Recipient

A recipient is deemed to be located in the taxable territory (India) if any two of the following conditions are met:

• The address provided via the internet is in India.
• The credit/debit card used for payment is issued in India.
• The billing address is in India.
• The IP address of the device used is in India.
• The bank account used for payment is maintained in India.
• The SIM card’s country code is Indian.
• The fixed landline used for receiving the service is located in India.

Additional Note: The government may later notify that the place of supply should be the place of effective use and enjoyment of a service to ensure uniform application of the rules.

OIDAR Services Through an Intermediary

When an intermediary outside India arranges or facilitates the supply of OIDAR services from the provider to a non-taxable online recipient, the intermediary is generally deemed the recipient. However, if the intermediary’s invoice clearly identifies the service and its supplier, does not collect or process payment, does not authorize the delivery, and the general terms of the supply are set by the service provider, then the intermediary will not be considered the recipient.

For more detailed guidance or tailored assistance on GST compliance for OIDAR services, please feel free to reach out. DisyTax is here to help you navigate these complexities with clarity and confidence.