Tax implication of Online Information Data Base Access and Retrieval (OIDAR) Services in GST
OIDAR refers to Online Information Data Base Access and Retrieval Services in GST, the tax implications are different for these services compared to the other types of transactions. It is applicable for only for the supply of services and the major difference is the provider of service is not in India but the recipient is in India. As the name it self suggests, theses services are provided by the supplier of services through the medium of internet and the recipient will download the same in India. The services can be like downloading an ebook or a music track or movie or a lecture or a pdf file etc.,
OIDAR Services have been defined in Section 2(17) of the IGST Act 2017 “online information and database access or retrieval services” means 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 includes electronic services such as,––
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
(v) online supplies of digital content (movies, television shows, music and the like);
(vi) digital data storage; and (vi) online gaming;
OIDAR Services are taxed in India in order to promote/protect the home-grown industries. It the service provider is not India, then there will not be taxes for which the recipient of services has to pay there by making it more economical and it is seen clearly in case of B2C Segment. To provide a level playing field taxation of OIDAR services has been introduced in India. In case of B2B supplies, they will be eligible to take input tax credit and will not have much impact on the landed cost but in case of B2C there will be remarkable difference to the tune of 18% which is the generic rate for services in GST. Now let’s examine the impact of ODIAR Services taxability in India and also the GST compliance requirements. Registration The service providers for OIDAR Services can be based in India or providing the services from any part of the globe as the services are provided through internet as a medium. In case if the supplier of services is located outside India and the recipient of Services is unregistered in India and services are supplied directly, in such cases, the registration has to be obtained by the service provider for GST in India and pay taxes accordingly. The registration can be done using the Form GST REG – 10. It is much simplified form compared to the general registration form and lesser information is required to be filed. In case if the Service Provider is providing the services through an intermediary or a representative, then such representative is required to be taking registration if not registered or not required if registered. In such cases also the levy of taxes will be IGST. Time of Supply The time of supply for OIDAR services will be for the time of supply of services. In case if the supplier of services collects advance and then delivers the service, in such cases a receipt voucher has to be issued on the collection of Advance and tax has to be remitted. In case if the tax invoice is issued immediately then tax invoice has to be issued.
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