OIDAR Registration in India for Foreign SaaS Providers

If your SaaS platform bills an Indian credit card, UPI handle, or wallet directly, without routing the sale through an Indian reseller or app store, Indian GST law treats you as a supplier operating inside India, whether or not you have a rupee bank account, an office, or a single employee here. This is the Online Information and Database Access or Retrieval (OIDAR) regime under the Integrated Goods and Services Tax (IGST) Act, 2017. It applies to cloud software, streaming, e-learning, online gaming, and most subscription digital products. The registration obligation attaches from the very first Indian transaction, and enforcement against unregistered foreign providers has picked up materially through 2025 and 2026 as payment gateway data sharing improved.

Is GST registration mandatory for foreign OIDAR providers in India?

Yes. Under Section 24(xi) of the Central Goods and Services Tax (CGST) Act, 2017, every person supplying OIDAR services from outside India to a non-registered person in India must register, with no turnover threshold. This differs from the standard ₹20 lakh exemption that applies to domestic service providers, and it applies from the first rupee of Indian revenue, not from the point the business becomes material.

What counts as an OIDAR service under Indian GST law

The definition sits in Section 2(17) of the IGST Act, 2017. Read literally, it once required that the service be “essentially automated” with “minimal human intervention.” The Finance Act, 2023, effective 1 October 2023, deleted that qualifier. The current test is simpler: does delivery depend on information technology over the internet or an electronic network, and would the supply be impossible without that technology. That single change pulled a much wider band of digital businesses into OIDAR, including services that involve real people on the delivery side (live tutoring platforms, proctored online exams, and hybrid customer support tools), because the old carve-out for human involvement no longer exists.

Services that Indian tax authorities and advance rulings have treated as OIDAR include:

• Software subscriptions, SaaS licences, and cloud hosting or storage
• Website hosting and remote maintenance of programs and equipment
• Provision of e-books, digital music, movies, and other intangibles through the internet
• Data or information retrieval services delivered electronically
• Online advertising and digital marketplaces
• Online gaming and in-app purchase platforms
• E-learning and automated online courses

If your product sits in any of these categories and an Indian user pays you directly, the registration question is not optional. It is a matter of confirming the mechanics, not debating the applicability.

Who is a non-taxable online recipient, and why the distinction matters

The compliance path splits entirely on who is buying.

A non-taxable online recipient (NTOR) is an individual, or a GST-registered entity buying for personal rather than business use, who receives OIDAR services and has no GST registration relevant to that purchase. Sales to NTORs are B2C in substance: the foreign provider charges Integrated GST (IGST) at 18 percent, collects it in the invoice, and remits it directly to the Indian government. There is no reverse charge here because the recipient has no GST registration through which to self-assess tax.

Sales to a GST-registered Indian business are treated differently. Section 13(12) read with the reverse charge provisions places the obligation to pay IGST on the Indian recipient itself, under the reverse charge mechanism. The foreign SaaS company does not need to charge GST on that invoice and, in most pure B2B models, does not need an OIDAR registration for that specific transaction stream. The practical difficulty is that most SaaS billing systems cannot reliably tell, at the point of sale, whether the buyer used a personal card for a business subscription or vice versa. This is where founders get the classification wrong, not on legal principle but on data capture.

Place of supply: why location of the recipient is the only test that matters

Section 13(12) of the IGST Act fixes the place of supply for OIDAR services as the location of the recipient, regardless of where the supplier sits. There is no proportionate allocation and no relief for a supplier with no Indian presence. The law then defines, through specified presumptions (billing address, IP address, bank details, SIM country code, or fixed landline), how a supplier determines that a recipient is “in India” for this purpose. Two of these presumptions pointing to India is generally treated as sufficient to fix the place of supply here, which is why most SaaS billing systems already capture enough signal (payment method country, billing address) to run this test automatically.

Step by step: the OIDAR registration process on the GST portal

1. Confirm the trigger before applying Registration under Section 24(xi) is required once a single supply is made to an NTOR in India. There is no grace period tied to revenue size.

2. Appoint an authorised representative in India Rule 14 of the CGST Rules requires an OIDAR applicant without a physical presence to appoint a person in India as an authorised representative for GST compliance. This is not a formality. The representative signs returns, receives notices, and is the point of contact for any departmental enquiry, which is why Indian tax authorities increasingly issue show cause notices to the representative when the foreign entity itself does not respond.

3. File Form GST REG-10 This is the simplified registration form specific to OIDAR providers, distinct from the standard REG-01 used by domestic taxpayers. It requires the entity’s incorporation documents, tax identification number in the home jurisdiction, authorised signatory details, and the authorised representative’s PAN and consent.

4. Complete OTP or digital verification Verification is typically completed through the applicant’s email and the authorised representative’s mobile number, since the standard Aadhaar-based verification path used for Indian entities does not apply.

5. Receive TRN, ARN, and GSTIN Once the application clears scrutiny, the portal issues a Temporary Reference Number, then an Application Reference Number, and finally the GSTIN under which invoicing and returns proceed.

6. Build the recipient classification logic into billing before go-live The registration is only half the exercise. Billing systems need a working rule for separating NTOR sales (charge IGST) from B2B sales to registered Indian entities (reverse charge, no IGST on invoice), because GSTR-5A asks for this split every month.

Registration timeline for OIDAR applicants (indicative, based on typical portal processing; actual timelines vary by jurisdiction and completeness of documentation)

Rate variations: not every OIDAR supply attracts 18 percent

The 18 percent rate is the default, but two carve-outs change the number founders should model into pricing. E-books supplied online, classified under HSN 9984, attract 5 percent GST rather than 18 percent, provided the e-book qualifies under the print-equivalent conditions the GST rate schedule sets out. Online money gaming was carved out of the OIDAR framework entirely with effect from 1 October 2023 and now sits under its own registration and valuation regime, taxed at 28 percent on the full face value of bets, not on platform fee or margin. A gaming or e-books business assuming a flat 18 percent across its product line will misprice both segments.

How is the invoice value converted from foreign currency to INR for OIDAR supplies?

Rule 34(2) of the CGST Rules requires the exchange rate applicable at the time of supply, determined under generally accepted accounting principles, generally the RBI reference rate applied consistently (daily, weekly, or monthly) across the billing cycle. The same converted INR value must then be used consistently across the tax invoice and the corresponding GSTR-5A entry, since a mismatch between invoice currency conversion and return reporting is a common trigger for departmental queries.

How B2B reverse charge actually works on the ground

For a sale to a GST-registered Indian business, the foreign OIDAR provider issues the invoice without charging IGST. The Indian recipient then raises a self-invoice, discharges the 18 percent IGST liability through its own GSTR-3B under reverse charge, and claims input tax credit if the subscription is used for business purposes. The foreign provider does not report this transaction in GSTR-5A at all; GSTR-5A is limited to supplies made to NTORs. This is precisely why a provider running mixed B2B and B2C billing needs the classification logic to be accurate before the invoice is generated, not corrected afterward, because a B2C transaction wrongly treated as B2B means IGST that should have been charged and remitted was never collected.

One export exemption does not extend here. Notification No. 10/2017-Integrated Tax lets ordinary service exporters below the standard threshold stay unregistered; that carve-out specifically excludes OIDAR and e-commerce-operator-facilitated supplies, so a foreign SaaS provider cannot rely on “we are exporting a service into India” reasoning to sidestep Section 24(xi).

The GST angle is not the only India tax exposure to check

Registering for OIDAR GST settles indirect tax on the transaction. It does not answer whether the same Indian revenue creates direct tax exposure under the Income-tax Act, 1961, and the two are frequently confused by foreign founders reading a single guide.

Two points are worth separating clearly:

• The equalisation levy, once relevant to many digital businesses, has been withdrawn. The 2 percent levy on e-commerce supplies was abolished with effect from 1 August 2024, and the 6 percent levy on online advertising was discontinued from 1 April 2025. A foreign SaaS provider structuring today does not need to plan around either levy.
• Significant Economic Presence (SEP) under Section 9(1)(i) of the Income-tax Act, 1961, is a separate and still-active test. A non-resident is deemed to have a taxable presence in India if aggregate payments from Indian residents cross the prescribed threshold in a financial year, or if the non-resident systematically solicits business or interacts with a specified minimum number of users in India, irrespective of physical presence. Where SEP is triggered, income attributable to that presence can become taxable in India under domestic law, subject to relief available under the applicable Double Taxation Avoidance Agreement (DTAA).

The practical takeaway: OIDAR GST registration and SEP-driven income tax exposure are assessed on different tests, apply to different tax bases, and require separate filings. Clearing one does not clear the other, and a provider that treats GST registration as full India tax compliance is leaving the direct tax question unanswered.

Record keeping and deregistration

Rule 56 of the CGST Rules requires OIDAR providers to maintain records of every Indian supply, including recipient details captured at the point of sale, for a minimum retention period, generally aligned to the standard six-year record retention window applicable under GST law. This matters in practice because a departmental query typically asks for the underlying transaction-level data behind a GSTR-5A filing, not just the return itself.

Where a foreign OIDAR provider genuinely exits the Indian market, with no further Indian NTOR supplies expected, the registration can be surrendered through the standard GST cancellation process, but only after all pending GSTR-5A returns are filed and outstanding IGST is cleared. A registration left dormant with unfiled returns accrues late fees indefinitely and is treated by the department as active non-compliance, not as an implicit exit.

OIDAR registration is not the same as NRTP registration

This is one of the most common conflations in founder-facing guidance, and it changes both the paperwork and the ongoing compliance rhythm. A Non-Resident Taxable Person (NRTP) registration under Section 24(ii) of the CGST Act is a time-bound registration meant for a foreign entity making occasional taxable supplies in India, valid only for the period specified in the application or 90 days, whichever is earlier, and it requires an advance deposit of estimated tax liability before registration is even granted. OIDAR registration under Section 24(xi) is a continuous registration with no expiry date and no advance deposit requirement, because the foreign provider is expected to be supplying on an ongoing subscription basis, not making a one-off transaction. A foreign SaaS company that registers under the wrong category, or that follows NRTP renewal advice picked up from a generic guide, ends up either over-depositing cash that was never required or missing a compliance step that OIDAR registration does not actually impose.

OIDAR versus NRTP registration (structural comparison under the CGST Act, 2017)

Freemium and free-tier models: when does the registration trigger actually fire

A foreign SaaS product with a free tier and a paid upgrade does not trigger OIDAR registration on the day an Indian user signs up for the free plan. The obligation attaches at the point an Indian recipient actually pays for a service, whether that is a subscription upgrade, an in-app purchase, or a one-time feature unlock. Founders running freemium models sometimes read “no turnover threshold” as meaning registration is required from the moment any Indian user touches the product, which overstates the trigger; the correct reading is that once a single Indian payment clears, there is no revenue floor below which registration can be deferred. Advertising-only monetisation with no direct Indian billing sits outside OIDAR on the same logic, though it may still raise separate income tax questions under the Significant Economic Presence test discussed above if user engagement in India is substantial.

GSTR-5A: the monthly return every registered OIDAR provider must file

Once registered, the compliance calendar is lighter in form count but strict on deadline. GSTR-5A is the sole periodic return for OIDAR providers and is due by the 20th of the following month. It captures gross Indian revenue, the NTOR versus B2B split, and the IGST collected and remitted. Because OIDAR providers pay tax on a forward charge basis with no domestic purchases to set off, there is no input tax credit available against this liability. The 18 percent IGST collected from NTOR customers is paid in full.

Late filing carries a per-day late fee under Section 47 of the CGST Act, and prolonged non-filing exposes the provider to the departmental notice process described below. A 2025 change also introduced a three-year outer limit on filing GST returns after their original due date, which means an OIDAR provider that has skipped filings for an extended period may find some periods permanently barred from being regularised, not just penalised.

What happens to foreign OIDAR providers who skip registration

This is the section founders read closest, and for good reason. India’s enforcement approach against unregistered foreign OIDAR providers has shifted from passive to active over the last two years. Authorities cross-reference three data sources: payment gateway and card network reporting of recurring international charges, the Annual Information Statement that already surfaces Indian consumers’ foreign subscription payments, and bilateral information-sharing arrangements with foreign tax authorities. Where a pattern of Indian revenue is identified against an entity with no GSTIN, the department’s usual sequence is a show cause notice, followed by recovery proceedings that can reach Indian assets or, where one exists, the authorised representative personally.

Section 122 of the CGST Act treats operating without a registration required by law as a punishable offence, with a minimum penalty that is the higher of ₹10,000 or the tax amount involved, in addition to the tax and interest that would in any case be recoverable. For a SaaS company with a meaningful India user base, the exposure compounds quickly across every unregistered month, not just the month a notice is issued.

Platforms, marketplaces, and the intermediary question

Not every foreign digital business bills the Indian customer directly. Many operate through an app store, marketplace, or reseller. Here the law asks whether the platform is merely facilitating the transaction (an intermediary) or is itself the deemed supplier of the OIDAR service. Where an intermediary arranges or facilitates supply and satisfies specified conditions, such as issuing the invoice in its own name and setting the price, the intermediary itself becomes liable to register and remit GST on the underlying supply. Where those conditions are not met, the liability reverts to the underlying foreign OIDAR provider. This four-condition test is fact specific and turns on invoicing flow, pricing control, and the terms between platform and provider, not on marketing labels like “marketplace” or “reseller.”

Common mistakes that cost foreign providers time and money

Waiting for a revenue threshold that does not exist. Founders coming from jurisdictions with a registration threshold (the European Union’s older distance selling limits, for instance) assume something similar applies here. Section 24(xi) has no floor. The first Indian NTOR transaction triggers the obligation.

Treating the 2023 definition change as irrelevant to a “human-assisted” product. Businesses that built proctored testing, live coaching, or managed cloud services around the old “minimal human intervention” carve-out often still believe they fall outside OIDAR. The Finance Act, 2023, removed that test. If delivery still depends on internet-mediated technology, the service is very likely inside the net regardless of the human layer on top.

No authorised representative in place before filing. Rule 14 makes this mandatory, not optional, and a representative appointed only after a notice arrives is compliance theatre. It signals to the department that governance was reactive, not built in.

Billing systems that cannot separate NTOR from B2B sales. GSTR-5A requires this split every month. Providers that bolt this classification on after registration, rather than at the payment gateway integration stage, spend months reconciling invoices retroactively, which is exactly the kind of manual error the department flags first in a review.

Assuming platform distribution removes the obligation entirely. Selling through an app store does not automatically shift liability. Unless the platform meets the specific conditions to be treated as deemed supplier, the underlying foreign OIDAR provider can still be the one on the hook.

Foreign SaaS teams treat registration as the finish line and only then discover that their payment gateway integration cannot reliably flag which Indian charges came from a GST-registered business account versus a personal card, which is precisely the split GSTR-5A demands under Section 24(xi) read with the reverse charge provisions. One pattern we see repeatedly with mid-sized platforms: the authorised representative appointed under Rule 14 is a junior operations hire with no visibility into the finance stack, so when a departmental query lands, the representative cannot answer basic questions about invoicing logic, and the response window lapses before the right person even sees the notice. We now insist on the representative sitting inside the finance or compliance function from day one, not as a mailbox.

Frequently asked questions

Q: Does OIDAR registration apply if I only have a handful of Indian customers?
A: Yes. Section 24(xi) of the CGST Act has no turnover or customer count threshold for foreign OIDAR providers. A single NTOR transaction is enough to trigger the obligation.

Q: What GST rate applies to OIDAR supplies?
A: 18 percent IGST on the value of the supply, with no input tax credit available to the OIDAR provider filing GSTR-5A, since the provider has no domestic purchases against which to claim credit.

Q: How long does OIDAR registration typically take?
A: Most applications clear in 7 to 15 working days from the point the authorised representative is in place and Form GST REG-10 is filed with complete documentation.

Q: What documents does a foreign entity need for Form GST REG-10?
A: Incorporation or business registration certificate, tax identification number in the home jurisdiction, PAN and consent letter of the authorised representative, and bank account details for tax remittance.

Q: Do I need to register separately if I sell through an app store?
A: It depends on whether the platform meets the conditions to be treated as deemed supplier. If it does not, the underlying foreign OIDAR provider remains liable to register regardless of the distribution channel.

Q: What is an authorised representative and why is it mandatory?
A: Rule 14 of the CGST Rules requires a foreign OIDAR applicant with no physical presence in India to appoint an authorised representative to manage GST compliance, sign returns, and respond to departmental communication.

Q: Does GSTR-5A require input tax credit reconciliation?
A: No. Since no input tax credit is available on this return, GSTR-5A is limited to reporting gross revenue, the NTOR versus B2B split, and the IGST collected and remitted.

Q: What happens if my platform sells to both Indian consumers and Indian businesses?
A: You charge IGST on NTOR (consumer or personal-use) sales and rely on the reverse charge mechanism for sales to GST-registered Indian businesses, which requires your billing system to classify each buyer correctly at the point of sale.

Q: Is there a startup or DPIIT exemption from OIDAR registration?
A: No. DPIIT recognition and startup tax exemptions apply to Indian income tax and certain regulatory relaxations; they do not create an exemption from Section 24(xi) mandatory GST registration for foreign OIDAR providers.

Q: What penalty applies for operating without OIDAR registration?
A: Section 122 of the CGST Act imposes a minimum penalty of the higher of ₹10,000 or the tax amount involved, in addition to recovery of the underlying tax and interest.

Q: Can prior period non-compliance be regularised once a foreign provider registers late?
A: In practice, providers can approach regularisation of prior liability along with the registration application, though the 2025 three-year filing restriction on GST returns means very old periods may fall outside what the portal will accept for filing.

Q: How does India determine that a customer is “located in India” for OIDAR purposes?
A: Through presumptions tied to billing address, IP address, bank account details, and telecom country code; typically, two or more of these pointing to India is treated as establishing the recipient’s location here.

Q: Does OIDAR apply to B2B-only SaaS companies with no consumer customers?
A: If every Indian buyer is a GST-registered business receiving the service for business use, the reverse charge mechanism generally shifts the payment obligation to the Indian recipient, but providers should still confirm classification carefully rather than assuming this by default, since misclassified personal-use purchases by employees of registered businesses can still count as NTOR supplies.

Q: Do all OIDAR supplies attract 18 percent GST?
A: No. E-books under HSN 9984 generally attract 5 percent, and online money gaming sits outside OIDAR entirely, taxed at 28 percent on full face value under a separate regime effective from 1 October 2023.

Q: Which exchange rate applies when converting foreign currency invoices to INR for GST purposes?
A: Rule 34(2) of the CGST Rules requires the rate applicable at the time of supply, determined under generally accepted accounting principles, applied consistently across the invoice and the corresponding GSTR-5A entry.

Q: Does the equalisation levy still apply to foreign SaaS providers?
A: No. The 2 percent equalisation levy on e-commerce supplies was withdrawn from 1 August 2024, and the 6 percent levy on online advertising was discontinued from 1 April 2025. Neither applies to current OIDAR structuring.

Q: Can OIDAR GST registration alone rule out Indian income tax exposure?
A: No. GST registration addresses indirect tax on the transaction only. Significant Economic Presence under Section 9(1)(i) of the Income-tax Act, 1961, is assessed separately based on Indian revenue thresholds or user interaction levels, and can create direct tax exposure subject to relief under the applicable DTAA.

Q: How long must OIDAR providers retain transaction records?
A: Rule 56 of the CGST Rules requires records of Indian supplies to be retained for the standard retention period applicable under GST law, generally six years, since departmental queries typically ask for transaction-level data behind a GSTR-5A filing.

Q: Is OIDAR registration the same as NRTP registration?
A: No. NRTP registration under Section 24(ii) is time-bound, valid for 90 days or the applied period, and requires an advance tax deposit. OIDAR registration under Section 24(xi) is continuous, has no expiry, and requires no advance deposit, since it is designed for ongoing subscription-based supply.

Q: Does a free tier or free trial trigger OIDAR registration?
A: No. The obligation attaches when an Indian recipient makes an actual payment, whether a subscription upgrade or in-app purchase, not when a free-tier user first signs up.

Regulatory references:

• Section 2(17), Integrated Goods and Services Tax Act, 2017 (definition of OIDAR services, as amended by the Finance Act, 2023, effective 1 October 2023)
• Section 13(12), Integrated Goods and Services Tax Act, 2017 (place of supply for OIDAR services)
• Section 24(xi), Central Goods and Services Tax Act, 2017 (mandatory registration for foreign OIDAR providers)
• Rule 14, Central Goods and Services Tax Rules, 2017 (authorised representative requirement)

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Treelife

Treelife Team | support@treelife.in

We are a legal and finance firm with a deep focus on the startup ecosystem. We offer a wide range of services, including Virtual CFO, Legal Support, Tax & Regulatory, and Global Expansion assistance.

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