Online Information Database Access and Retrieval services (OIDAR) is a category of services provided through the medium of the internet, and received by the recipient online without having any physical interface with the supplier of such services.
Example: Download of an e-book online for a payment would amount to receipt of OIDAR services by the consumers.
A service should be classified as OIDAR service only if the following two conditions are satisfied
But the overseas suppliers of such services would have an unfair advantage if the services provided are left out from tax and the compliance mechanism become difficult as the service provider is located in Overseas. Hence the government has come out with a simplified scheme of GST Registration.
The Place of Supply should be in India for any supply to be taxable in India,
The supplier of OIDAR services located in non-taxable territory shall be the person liable to pay IGST on supply of such services.
Non-Taxable online recipient means any government, local authority, governmental authority, an individual or any other person not registered and receiving OIDAR services in relation to any purpose other than commerce, industry or any other business or profession located in taxable territory.
The supplier of OIDAR service should comply with GST as follows
The place of supply of OIDAR services is location of recipient of services.
It is difficult to determine the location of the recipient in case of OIDAR services. The service recipient is deemed to be located in taxable territory on satisfying any of the 2 conditions
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