Directorate General of Goods and Service Tax Intelligence (DGGI) recently suggested reciprocal arrangements to prevent tax evasion in OIDAR services like e-gaming, online education and advertisement.
About OIDAR Services:
- Online Information and Database Access or Retrieval (OIDAR) services are digital services that are delivered over the internet or electronic networks.
- These services are essentially impossible to provide without the use of information technology.
- Examples of OIDAR services include:
- Cloud services: Storage, computing, and software services delivered over the internet.
- Digital content: Streaming services, e-books, and online courses.
- Online gaming: Online games and virtual worlds.
- Online advertising: Display advertising, search engine marketing, and social media advertising.
Key characteristics of OIDAR services:
- OIDAR services are not physical products, but accessed and consumed over the internet.
- Their delivery is mediated by information technology over the internet or an electronic network.
- Their supply is essentially automated and involving minimal human intervention.
- The provision of OIDAR services relies heavily on information technology infrastructure.
- When an offshore entity provides OIDAR services to a non-taxable recipient (unregistered) in India, the supplier becomes liable for obtaining registration and discharging GST on the same.
- This means that even if the recipient is not liable for GST in India, the offshore supplier must register and pay GST on the services provided.
Ref: Source
| UPSC IAS Preparation Resources | |
| Current Affairs Analysis | Topperspedia |
| GS Shots | Simply Explained |
| Daily Flash Cards | Daily Quiz |
Frequently Asked Question:
What are OIDAR services?
OIDAR services are digital services delivered over the internet that rely on information technology infrastructure. Examples include cloud services, digital content, online gaming, and online advertising.
Why are OIDAR services subject to GST in India?
When an offshore entity provides OIDAR services to a non-taxable recipient in India, the supplier becomes liable for GST.
What are the potential benefits of registering for GST for offshore OIDAR service providers?
Registering for GST can help offshore entities to comply with Indian tax laws and avoid penalties. It can also improve their reputation and credibility in the Indian market.