GST on OIDAR Services: What It Is, Who It Affects and Why It Matters to You
Think about the time you paid for a Netflix subscription.. The time you bought a software plan on Canva or paid for cloud storage on Google Drive or took an online course on a foreign e-learning platform. All of these transactions have one thing in common that most people never think about: they involve what is called OIDAR services under GST law.
If you are a business owner, a freelancer or even just someone who regularly buys services from foreign companies, understanding OIDAR and how GST applies to it is really useful.. The good news is that once someone explains it in simple terms it is not nearly as complicated as the name makes it sound.
So let us get into it.
What Does OIDAR Mean?
OIDAR stands for Online Information and Database Access or Retrieval services. Yes it is a mouthful and yes the abbreviation is not much better.. The concept behind OIDAR services is fairly straightforward.
OIDAR services are services that are delivered over the internet are highly automated and require very little or no human intervention. The key idea is that the service is provided through the internet and is essentially impossible to provide without technology.
Some common examples of OIDAR services include:
- Streaming platforms like Netflix, Spotify or Disney. Where you watch or listen to content online.
- Cloud computing services where you store data or run applications on servers.
- Online advertising services.
- E-learning platforms where courses are accessed digitally.
- Online gaming platforms.
- Downloading of software apps, e-books, music, movies or digital magazines.
- Search. Database access services. If you notice a pattern it is this: all these services are consumed digitally delivered automatically and the provider does not need to physically be present in India to serve Indian customers. That is exactly what makes OIDAR services a special category under GST.
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