What are OIDAR services under GST and who pays the tax?

Many tools that Indian freelancers and agencies use every day are "online information and database access or retrieval services", usually shortened to OIDAR. The label matters because GST has a separate rule for who pays the tax when these services cross the border.¹²

This guide explains the OIDAR definition, how the place of supply is decided, when the foreign supplier pays and when you do, and how the rules apply when an Indian business is the one selling digital services abroad. The position is stated as of 28 October 2026.¹

What is an OIDAR service under GST?

An OIDAR service is a service whose delivery is mediated by information technology over the internet or an electronic network, and whose nature makes the supply impossible to ensure without information technology, under section 2(17) of the Integrated Goods and Services Tax (IGST) Act, 2017.¹ The definition expressly includes:¹

• Advertising: advertising on the internet.
• Cloud: providing cloud services.
• Intangibles: provision of e-books, movies, music, software and other intangibles through telecommunication networks or the internet.
• Data: providing data or information, retrievable or otherwise, to any person in electronic form through a computer network.
• Digital content: online supplies of digital content (movies, television shows, music and the like).
• Storage: digital data storage.

The CBIC text also shows a clause on online gaming substituted by the IGST (Amendment) Act, 2023, marked as yet to be notified.¹

Did the OIDAR definition change in 2023?

Yes. Section 160 of the Finance Act, 2023 omitted words from the part of section 2(17) that describes the nature of the supply, and substituted the definition of non-taxable online recipient in section 2(16), both with effect from 1 October 2023 under Notification No. 28/2023-Central Tax.¹

• Old test: older articles that quote a test of being "essentially automated" with "minimal human intervention" describe the pre-amendment text; the current CBIC text no longer contains it.¹
• Human input: a service with human input can therefore still be OIDAR if it is delivered over the internet and cannot be supplied without information technology.¹
• Common examples: a cloud design tool, a stock photo subscription, an online data platform, a website hosting plan, and paid online advertising are commonly argued to fall within the definition.
• Edge case: for example, live one-to-one consulting over a video call uses the internet, but whether the consulting itself is "impossible to ensure" without information technology is a matter of facts.¹

Who pays GST on OIDAR services supplied into India?

The answer depends on whether the Indian buyer is registered under GST: the foreign supplier pays for unregistered buyers, and registered buyers pay under reverse charge.²³

Section 2(16) defines a non-taxable online recipient as any unregistered person receiving OIDAR services in the taxable territory, and treats a person registered only to deduct tax under section 24(vi) of the CGST Act as unregistered.¹ For reverse charge by registered buyers, see reverse charge on imported SaaS tools.

How does a foreign OIDAR supplier register and pay GST in India?

A foreign OIDAR supplier selling to non-taxable online recipients takes a single registration under the simplified registration scheme and pays IGST, under section 14(2) of the IGST Act.²

1. Identify customers who are non-taxable online recipients, meaning unregistered persons in India.¹
2. Test the place of supply under section 13(12), covered below.⁴
3. Apply for registration in FORM GST REG-10 under rule 14 of the CGST Rules.⁶
4. If the supplier has a representative in India, that person must register and pay; if it has neither physical presence nor a representative, it may appoint a person in India to pay the tax.²
5. Pay IGST on supplies to non-taxable online recipients.²

Section 24(xi) of the CGST Act separately lists persons supplying OIDAR services from outside India to persons in India, other than registered persons, among those who must register regardless of turnover.⁵

What rules apply to OIDAR services under GST?

Seven provisions set the OIDAR rules: two definitions, the place of supply rule, the special payment rule, the registration rules and the reverse charge notification.¹²³⁴⁵⁶

Read these together when deciding who pays on a particular purchase or sale.

How is the place of supply of OIDAR services decided?

The place of supply of OIDAR services is the location of the recipient, under section 13(12) of the IGST Act.⁴ The Explanation to section 13(12) deems the recipient to be located in India if any two of these non-contradictory conditions are met:⁴

• Address: the address presented by the recipient through the internet is in India.
• Card: the card used to pay was issued in India.
• Billing address: the billing address is in India.
• IP address: the IP address of the device used is in India.
• Bank account: the bank account used for payment is held in India.
• SIM card: the country code of the SIM card is Indian.
• Landline: the fixed landline through which the service is received is in India.

Two matching indicators are enough, so check the data your checkout collects.⁴

When is a marketplace treated as the OIDAR supplier?

A marketplace is treated as the OIDAR supplier when it is an intermediary located outside India that arranges or facilitates OIDAR supplies to non-taxable online recipients, under the proviso to section 14(1).² The intermediary escapes this deeming only if all four conditions are met:²

1. Its invoice or receipt clearly identifies the service and its supplier outside India.²
2. It does not authorise the charge to the customer or take part in it, meaning it does not collect or process the payment.²
3. It does not authorise delivery.²
4. The general terms of the supply are set by the supplier, not the intermediary.²

App stores and content marketplaces are the usual example. This matters for Indian developers and creators who sell through them; see app store income, GST and tax.

What happens when an Indian business sells OIDAR services abroad?

When an Indian business sells OIDAR services to customers outside India, section 14 does not apply, because it covers suppliers located in a non-taxable territory.² The supply is tested under the five export conditions in section 2(6) of the IGST Act, and the place of supply is the location of the recipient under section 13(12).¹⁴ If all five conditions are met, the supply is an export and therefore zero-rated under section 16.⁷

• SaaS: for example, an Indian SaaS company billing a German subscriber.
• Digital assets: an illustrator in Kochi selling a digital asset pack to a US buyer through her own site.
• Courses: an online course creator in Jaipur selling recorded lessons to a learner in Singapore.

See GST on SaaS sold to foreign customers for the detail, and confirm edge cases, such as sales routed through a marketplace or a merchant of record, with a chartered accountant.

What are the common mistakes with OIDAR services under GST?

The common mistakes with OIDAR services are relying on the old definition, letting a foreign supplier charge GST to a registered business, and applying section 14 to Indian exporters.¹²³

• Old definition: quoting the "essentially automated" test that the Finance Act, 2023 removed.¹
• Wrong payer: a registered business paying GST charged by a foreign supplier instead of paying under reverse charge.¹³
• Section 14 for exporters: section 14 covers suppliers outside India, so an Indian seller abroad applies the export conditions.¹²
• Ignoring marketplaces: a foreign intermediary can be the deemed supplier unless all four conditions are met.²

When a purchase or sale does not fit neatly, check the facts against each provision in the table above.