Taxability of OIDAR Services under GST

  • Blog|GST & Customs|
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  • By Taxmann
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  • Last Updated on 5 January, 2021

1. Where supplier of OIDAR service and receiver are in India:

The place of supply as per section 12(2) shall be location of the recipient.

2. Where either supplier or receiver is outside India:

The place of supply as per section 13(12) shall be location of the recipient. The location of recipient of service is defined in section 2(14) of the IGST Act.
 
Explanation: For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied, namely:
 
  • The location of address presented by the recipient of services through internet is in the taxable territory;
 
  • The credit card, debit card, store value card, charge card, smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;
  •  The billing address of the recipient of services is in the taxable territory;
 
  • The internet protocol address of the device used by the recipient of services is in the taxable territory;
 
  • The bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;
 
  • The country code of the subscriber identity module card used by the recipient of services is of taxable territory;
 
  • The location of the fixed land line through which the service is received by the recipient is in the taxable territory.
 
However, as per section 14 of the IGST Act, where online information and database access or retrieval services are provided by any person located in a non-taxable territory and are received by a non-taxable online recipient in taxable territory, then the supplier of such service shall be liable to discharge integrated tax. The non-taxable online recipient is defined in section 2(16) of the IGST Act. The supplier of such service shall take a single registration under a single registration scheme notified by the Government.
 
As per section 2(16), “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 the taxable territory.
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