Online Information Data Base Access and Retrieval (OIDAR) Services in GST
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Forty Two
Online Information Data Base Access and Retrieval (OIDAR) Services in GST
WHAT IS OIDAR?
Online Information Database Access and Retrieval services (hereinafter referred to as OIDAR) is a category of services provided through the medium of internet and received by the recipient online without having any physical interface with the supplier of such services. E.g. downloading of an e-book online for a payment would amount to receipt of OIDAR services by the consumer downloading the e-book and making payment.
The IGST Act defines OIDAR to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and
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hould the services provided by them be left out of the tax net. At the same time, since the service provider is located overseas and may not be having a presence in India, the compliance Online Information Data Base Access and Retrieval Services in GST verification mechanism become difficult. It is in such circumstances, that the government has plans to come out with a simplified scheme of registration for such service providers located outside.
HOW WOULD OIDARSERVICES BE TAXABLE UNDER GST?
For any supply to be taxable under GST, the place of supply in respect of the subject supply should be in India. In case, both the supplier of OIDAR Service and the recipient of such service is in India, the place of supply would be the location of the recipient of service i.e. it would be governed by the default place of supply rules.
What happens in cases where the supplier of service is located outside India and the recipient is located in India. In such cases also the place of supply would be
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vices by any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services.
Now if an intermediary located outside India arranges or facilitates supply of such service to a non-taxable online recipient in India, the intermediary would be treated as the supplier of the said service, except when the intermediary satisfies the following conditions.
(a) the invoice or customer's bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in non-taxable territory;
(b) the intermediary involved in the supply does not authorise the charge to the customer or take part in its charge which is that the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the nontaxable online recipient an
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supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.
Who is a Non-Taxable Online Recipient?
“non-taxable online recipient” means any Government, local authority, governmental authority, an individual or any other person not registered and receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.
The expression “governmental authority” means an authority or a board or any other body,
i) set up by an Act of Parliament or a State Legislature; or
ii) established by any Government,
with ninety per cent or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitu
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hotographs, reports, medical results
Yes
No
No
Indicative List of OIDAR Services
1. Website supply, web-hosting, distance maintenance of programmes and equipment;
(a) Website hosting and webpage hosting;
(b) automated, online and distance maintenance of programmes;
(c) remote systems administration;
(d) online data warehousing where specific data is stored and retrieved electronically;
(e) online supply of on-demand disc space.
2. Supply of software and updating thereof;
(a) Accessing or downloading software (including procurement/accountancy programmes and antivirus software) plus updates;
(b) software to block banner adverts showing, otherwise known as Banner blockers;
(c) download drivers, such as software that interfaces computers with peripheral equipment (such as printers);
(d) online automated installation of filters on websites;
(e) online automated installation of firewalls.
3. Supply of images, text and information and making available of databases;
(a) Acce
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, ringtones, or other sounds;
(c) accessing or downloading of films;
(d) downloading of games on to computers and mobile phones;
(e) accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are geographically remote from one another.
(5) Supply of distance teaching.
(a) Automated distance teaching dependent on the Internet or similar electronic network to function and the supply of which requires limited or no human intervention, including virtual classrooms, except where the Internet or similar electronic network is used as a tool simply for communication between the teacher and student;
(b) workbooks completed by pupils online and marked automatically, without human intervention, The place of supply of online information and database access or retrieval services shall be the location of the recipient of services.
Filing of Returns by a person providing OIDAR service to a non-taxable online recipient in India.
In
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