GST Registration for Foreign Online Service Providers (OIDAR)

If you are a non-resident business selling digital goods or services to customers in India, you likely fall under the OIDAR (Online Information Database Access and Retrieval) regulations. India has strict rules designed to ensure foreign companies pay their fair share of GST when selling to the Indian market.

What Constitutes OIDAR?

OIDAR services are those whose delivery is mediated by information technology over the internet, and where the supply is essentially automated involving minimal human intervention.

Examples include:

• Software as a Service (SaaS) subscriptions
• Cloud infrastructure services (AWS, DigitalOcean)
• Streaming media (Netflix, Spotify)
• E-books and digital downloads
• Online gaming and in-app purchases
• Online advertising

The B2C vs. B2B Distinction

The compliance burden depends entirely on who you are selling to.

B2C Sales (Unregistered Indian Customers)

If your customer is an individual or an unregistered business in India, you are making a B2C sale. Your obligations:

1. You must register for Indian GST under the OIDAR scheme (using Form REG-10). There is no minimum turnover threshold; the requirement triggers from your first sale.
2. You must charge 18% IGST on top of your invoice price.
3. You must file a monthly return (GSTR-5A) by the 20th of the following month.

B2B Sales (GST-Registered Indian Businesses)

If your customer is a GST-registered business in India and provides you with a valid GSTIN:

1. You do not need to charge GST on your invoice.
2. The Indian buyer is responsible for calculating and paying the 18% IGST directly to the government under the Reverse Charge Mechanism (RCM).
3. You only need to ensure you collect their GSTIN during checkout.

The Post-October 2023 Trap

Effective October 1, 2023, India expanded the definition of OIDAR and Non-Taxable Online Recipient (NTOR). Previously, foreign sellers could argue that certain B2C sales were exempt. Now, virtually all B2C digital sales require OIDAR registration.

How to Register

Registering for OIDAR does not require incorporating a subsidiary in India or getting an Indian PAN.

1. Apply via the GST Portal using Form GST REG-10.
2. Provide your foreign entity’s incorporation certificate and tax ID from your home country.
3. Appoint an Authorized Signatory in India (a service provider like Batchwise can act as your signatory for compliance purposes).

Once registered, you’ll receive a special GSTIN starting with 99, indicating your OIDAR status.

Monthly Compliance (GSTR-5A)

OIDAR taxpayers must file GSTR-5A by the 20th of each month. This return is simpler than standard GST returns, requiring only a summary of your B2C sales to India and the IGST collected. However, penalties for late filing are strict, and a “Nil” return is required even if you had zero sales in a given month.

Batchwise handles end-to-end OIDAR compliance for foreign businesses. Learn more about our OIDAR Registration & Filing Service.