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India OIDAR Compliance for SaaS: Registration, Rates, and B2C Rules

India's OIDAR regime — Online Information Database Access and Retrieval — is the country's mechanism for taxing foreign digital services, including SaaS. Most foreign SaaS vendors underestimate it because the pre-2023 rules only reached unregistered consumers, a small slice of most B2B-heavy books. The October 2023 amendment changed that dramatically, pulling unregistered businesses and government bodies into the B2C net. This guide explains the current scope, the 18% GST rate, and how to register and file.

What OIDAR covers

OIDAR is defined in Section 2(17) of the IGST Act 2017 as services delivered over the internet where the supply is essentially automated and requires minimal human intervention. The scope includes:

Most SaaS products fall squarely inside OIDAR. Services that require meaningful human intervention — live tutoring, human consulting delivered over a video call — do not, though the line can be subjective.

The October 2023 scope expansion

Before 1 October 2023, the OIDAR regime only applied to supplies to a "non-taxable online recipient" which was defined narrowly as a government body, local authority, or individual receiving services for non-business purposes. Supplies to any registered business fell under reverse charge — the Indian customer self-assessed IGST, and the foreign vendor had no registration obligation.

The 2023 Finance Act amended Section 2(16) of the IGST Act and expanded the definition of a non-taxable online recipient to include any person receiving OIDAR services for any purpose, other than a registered person. In practice, this means:

Implication: Vendors who previously thought they had "only B2B in India" almost certainly need to re-assess. Many Indian SMBs and sole proprietors operate below the GST registration threshold and will now count as B2C for OIDAR.

Rate and registration threshold

The rate is 18% IGST (Integrated GST, the cross-state variant), applied to the value of the supply. There is no registration threshold — the obligation begins at the first rupee of qualifying supply to a non-taxable online recipient in India.

Step 1: Simplified OIDAR registration (Form GST REG-10)

Foreign OIDAR suppliers register using Form GST REG-10 on the GST portal at gst.gov.in. This is a simplified registration available only to non-resident OIDAR suppliers — it does not require an Indian bank account, an Indian address, or an authorised signatory resident in India.

Details required:

On approval, the supplier receives a GSTIN (GST Identification Number) of the form 9917XX9999OSK where OS marks online services.

Step 2: Determining the customer location

For OIDAR, Section 13(12) of the IGST Act sets out presumptions for locating the recipient. The customer is in India if any two of the following are met:

This mirrors the EU's two-piece test. Store the evidence pair on every invoice.

Step 3: Invoicing requirements

OIDAR invoices must include:

E-invoicing under the IRN (Invoice Reference Number) system is generally not required for OIDAR suppliers below the e-invoicing turnover threshold, but this is an evolving area — track updates from the GST Council.

Step 4: Filing and payment

OIDAR suppliers file GSTR-5A, a return specific to non-resident OIDAR vendors, on a monthly basis. The return is due by the 20th of the following month, and payment must be made in full by the same date. Returns are filed in INR, and supplies in foreign currency are converted to INR at the RBI reference rate on the date of supply.

Key obligations:

B2B reverse charge — what still works

If your Indian customer provides a valid GSTIN, the transaction is B2B and falls under Section 5(3) IGST reverse charge. The Indian customer self-assesses 18% IGST, claims it as input tax credit, and the foreign vendor does not collect tax on that invoice. Validate the GSTIN before relying on the reverse charge — the GST portal offers a public taxpayer search and an API for programmatic checks.

Common mistakes

  1. Treating all Indian customers as B2B. Post-October 2023, unregistered recipients are B2C regardless of their business purpose.
  2. Missing the location evidence. Store two pieces per invoice; tax authorities can and do sample.
  3. Filing late. Monthly filing under GSTR-5A is strict, and late fees accrue daily.
  4. Assuming a Merchant of Record covers it. If you self-invoice Indian customers, you are the taxpayer — MoR coverage only applies where the MoR contracts with the end customer.

Frequently asked questions

What is OIDAR in Indian GST?

Online Information Database Access and Retrieval — India's framework for taxing automated digital services supplied over the internet. Foreign OIDAR suppliers register and charge 18% GST on B2C supplies.

Do I need to register if I only sell to Indian businesses?

If all Indian customers have a valid GSTIN, reverse charge applies and no registration is needed. Since October 2023, any sale to a non-registered recipient (including unregistered SMBs) is B2C and triggers registration.

What is the India OIDAR registration threshold?

Zero. Registration is required from the first rupee of B2C supply.

How do I file GSTR-5A?

Monthly on the GST portal, due by the 20th of the following month, with IGST paid in INR by the same date.

DeterminedAI classifies Indian customers as B2B or B2C based on GSTIN validation, applies reverse charge or 18% IGST automatically, and captures the location evidence GSTR-5A reviewers look for.

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