OIDAR services: registration, compliance and the 2023 amendment
A foreign supplier with no presence in India, a consumer with a credit card, and a tax that has to be collected somehow.
Online information and database access or retrieval services supplied by a person outside India to a non taxable online recipient in India are taxable, with the supplier liable to register and pay tax under the simplified scheme in Section 14 of the IGST Act. The 2023 amendments removed the requirement of minimal human intervention from the definition and widened non taxable online recipient to include unregistered persons receiving services for any purpose, which expanded the scope significantly.
What changed in 2023
The definition of OIDAR previously required that the service be essentially automated and involve minimal human intervention. That requirement was removed, so services with a human element can now fall within OIDAR.
The definition of non taxable online recipient was widened to cover any unregistered person receiving such services in India, irrespective of the purpose, whereas earlier the reference to purposes other than commerce, industry or business created a gap.
The practical effect is that a much larger population of foreign digital suppliers is within the net, including those supplying online coaching, consultancy delivered digitally, and subscription content with human curation.
Where the recipient is registered in India, the transaction is an import of services and reverse charge applies instead.
The compliance model
A foreign supplier registers under the simplified scheme and files the prescribed return, paying integrated tax on supplies to non taxable online recipients.
Where the supply is made through an intermediary located outside India, the intermediary is deemed to be the supplier in the circumstances specified, unless the conditions for exclusion are satisfied — the invoice identifies the service and the supplier, the intermediary does not authorise the charge or the delivery, and does not set the terms.
An appointed representative in India may be used for compliance.
For the Indian recipient, the practical question is whether it is registered. A registered recipient must self assess under reverse charge; an unregistered recipient bears the tax charged by the supplier.
Where the exposure sits for Indian businesses
An Indian business that is registered and receives digital services from abroad is on reverse charge, not OIDAR. The exposure is the unrecorded subscription, not the OIDAR scheme.
An Indian platform that facilitates foreign digital supplies to Indian consumers should examine whether it is an intermediary deemed to be the supplier.
Where a foreign supplier has charged tax under OIDAR to a registered Indian recipient, the recipient may nonetheless be assessed on reverse charge, and the position must be corrected with the supplier rather than absorbed.
Marketing and distribution arrangements with foreign digital suppliers should be examined for the intermediary questions in both Section 2(13) and the OIDAR deeming provision.
What to do on Monday
Determine registration status for every digital service relationship; it decides the mechanism.
Examine platform and distribution arrangements against the deeming provision for intermediaries.
Where a foreign supplier charges tax to your registered entity, correct it rather than absorbing it.
Review your subscription and digital spend annually for reverse charge completeness.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Does OIDAR apply where the Indian recipient is registered?
No. That is an import of services and reverse charge applies.
Does the removal of minimal human intervention widen the scope?
Yes, materially. Services with a human element delivered digitally can now fall within OIDAR.
Who pays when the supply goes through a foreign platform?
The platform may be deemed the supplier unless the conditions for exclusion are satisfied. Examine the invoicing and the terms.
What if a foreign supplier charges us tax and we are registered?
Raise it with the supplier and correct the position; you remain liable under reverse charge and cannot rely on their charge.
Is a representative in India required?
A representative may be appointed for compliance under the scheme. Verify the current requirement.
In this cluster
- Place of supply under GST: the full decision tree
- Intermediary services: characterisation, exposure and structuring
- Export of services: the five conditions and where claims fail
- Dharmendra M. Jani: the constitutional attack on intermediary taxation, and where it stands
- Mohit Minerals: ocean freight, composite supply, and the sentence that changed GST federalism
- Import of services and reverse charge under Section 5(3) of the IGST Act
- Bill to ship to transactions and Section 10(1)(b)
- High seas sales, bonded warehouse transfers and Schedule III
- Merchant trade and out and out supplies
- Goods transport agencies: reverse charge, the rate option and place of supply
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.