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March 16, 2026

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GST Rules

OIDAR Services: Place of Supply Rules Explained

You subscribe to a cloud tool. Or stream a show. Or run ads through a platform based overseas. The service feels simple. The GST treatment rarely is.

Most confusion around OIDAR starts at one point: the place of supply. Get that wrong, and GST liability flips. Between you and the supplier. Between RCM and registration. Between compliant and exposed. This guide clears that fog and shows you exactly how the rules work in real scenarios, not theory.

Here’s what we’ll break down, step by step:

What qualifies as an OIDAR service
How the place of supply gets decided under Section 13(12)
B2C vs B2C rules, with who pays the tax
How the recipient location is identified using practical indicators
Common scenarios that foreign and Indian businesses face every day

What are OIDAR Services under GST?

OIDAR stands for Online Information and Database Access or Retrieval.

In plain terms, these are services you receive through the internet to work and reach you digitally, which likely fall under OIDAR. GST treats these services differently for one reason. They cross borders without effort. In 2023, the definition changed. The wording around automation and limited human input was removed. The scope widened. Services delivered online now qualify even if some human involvement exists.

Common examples include:

Streaming subscriptions
Cloud-based tools
Online advertising platforms
Software access or licenses
Online gaming services

That shift explains why the place of supply matters so much here. And why does confusion show up fast?

Why the place of supply matters for OIDAR Services

GST follows a destination-based model. Tax applies where the service is used, not where the provider sits. That rule works cleanly for physical services. Digital ones break the pattern.

OIDAR services move across borders without offices, staff, or sight. A platform based overseas can serve users in India within seconds. No physical footprint. Full consumption still happens here.

That gap creates risk. Get the place of supply wrong, and GST shifts hands. Liability moves from supplier to recipient. Or the other way around. Miss it entirely, and tax slips through.

Special rules exist for OIDAR to close that gap. They anchor taxation to the recipient’s location and pull foreign digital suppliers into the GST net. No ambiguity. No free passes.

Place of supply for OIDAR Services (Section 13(2))

This section decides everything. Taxability. Liability. Compliance. Get this right, and the rest falls into place.

Default rule for OIDAR Services

Place of supply equals the location of the recipient. That rule applies across the board. Supplier location does not change it. Domestic or foreign, the outcome stays tied to where the user sits.

How the recipient location is determined

Things get tricky when the supplier is outside India. The law solves that with a simple test. If any two of the indicators below point to India, the recipient counts as located in India:

Billing address
IP address of the device used
Credit or debit card issuance country
Bank account used for payment
SIM card country code
Fixed landline location
Address shared during signup or use

The indicators must not conflict with each other. Two matching signals close the loop. This test mainly applies to foreign suppliers. It helps them confirm the recipient's location before charging GST or deciding who pays it.

OIDAR Place of supply: Common scenarios explained

This is where most confusion clears up. Same service. Different setup. Different GST outcome.

The table below shows how the placement of supply and tax liability changes based on who supplies, who receives, and where they sit.

Supplier location	Recipient location	Recipient type	Place of supply	Who pays GST
India	India	Registered or unregistered	India	Supplier (forward charge)
Outside India	India	Registered (B2B)	India	Recipient (RCM)
Outside India	India	Unregistered (B2C)	India	Foreign supplier (via registration)
India	Outside India	Any	Outside India	No GST (export rules apply)
Outside India	Outside India	Any	Outside India	No GST

A few patterns stand out fast:

Recipient location drives place of supply
Registration status decides who pays
Cross-border does not mean tax-free by default

Once you map a transaction into this table, the GST treatment stops being guesswork.

Who pays GST on OIDAR Services?

Once the place of supply points to India, the next question hits fast.

Who actually pays the tax?

The answer depends on one thing. Registration status.

B2B OIDAR Transactions

In a B2B setup, the recipient holds a valid GST registration.

Here’s how it plays out:

Place of supply stays in India if the recipient sits in India
GST applies under the Reverse Charge Mechanism (RCM)
The Indian recipient pays IGST directly to the government

The foreign supplier does not charge GST on the invoice. The liability shifts cleanly to the recipient. Input credit may follow, subject to standard rules.

B2C OIDAR Transactions

In a B2C setup, the recipient stays unregistered. Think individuals. Think personal use.

Here, the responsibility flips:

The foreign supplier must take GST registration under the simplified scheme
IGST gets charged on the subscriptions or service fees
The supplier pays the tax to the Indian government

Example: An individual in India subscribes to a foreign streaming platform. The platform detects an Indian billing address and an India-issued card. Place of supply lands in India. The platform charges IGST and pays it after registering under GST. Same service. Same country. Different payer.

Special rules for foreign OIDAR service providers

Foreign OIDAR providers face a separate set of obligations once the place of supply lands in India. Presence does not matter. Consumption does.

Registration stays mandatory:

Apply under FORM GST REG-10
No turnover threshold applies
Even a single Indian consumer triggers registration

You get two ways to comply:

Register directly under the simplified scheme
Appoint a representative in India to handle tax payments on your behalf

Once registered, compliance stays ongoing. Foreign OIDAR providers must

File GSTR-5A
Do it every month
Meet the 20th deadline without fail.

No activity during the month does not pause filing. Nil returns still apply.

OIDAR services are supplied through an intermediary

Intermediaries add one more layer. And that layer decides who the law treats as the supplier.

An intermediary gets treated as the supplier when it controls the transaction. That includes situations where it handles payments, authorizes delivery, or sets the commercial terms. In those cases, GST liability shifts to the intermediary.

An intermediary does not get treated as the supplier when it stays in the background. The law lays out four clear conditions. All four must hold:

The invoice clearly identifies the actual service and the foreign supplier
The intermediary does not collect or process payments
The intermediary does not authorize delivery of the service
The actual supplier sets the terms and conditions

Meet all four, and the intermediary steps aside; miss even one, and the intermediary steps into the tax spotlight. The distinction matters. It decides who registers, who files, and who pays IGST.

Key takeaways on OIDAR place of supply

Here’s the full picture, stripped down to what sticks:

Place of supply follows the recipient’s location
Two matching indicators confirm whether the recipient sits in India
B2B transactions shift GST to the recipient under RCM
B2C transactions push GST liability to the foreign supplier
Physical presence does not matter once consumption happens in India

If you track the recipient location correctly, the GST outcomes stop being a guessing game. Everything else flows from that single decision.

Conclusion

You now know how OIDAR's place of supply works, who pays GST, and where liability shifts. That clarity saves time, avoids exposure, and keeps digital transactions clean as they scale.

Recipient location drives everything. So getting those indicators right decides taxability before invoices go out.
B2B and B2C follow different payment paths, which change who files, who pays, and how compliance flows
Foreign suppliers face mandatory registration, even without offices, teams, or assets in India
Intermediary roles matter, since one missed condition can move GST liability instantly

If tracking this manually feels risky, Swipe fits next. It helps you apply these rules consistently, spot issues early, and keep OIDAR compliance from slowing your growth.

FAQs

1. What is the place of supply for OIDAR services under GST?

The place of supply is the recipient's location. This rule applies no matter where the supplier operates.

2. Does RCM apply to OIDAR services?

Yes. RCM applies in B2B cases where the recipient holds a GST registration, and the supplier sits outside India.

3. Do foreign digital service providers need GST registration in India?

Yes. Foreign suppliers serving Indian consumers must register, even without offices or staff in India.

4. How is the recipient location determined for OIDAR?

Suppliers rely on two matching indicators, such as billing address, card issuance country, or bank location, to confirm India as the recipient location.