Effective October 1, foreign companies that provide online services like advertising, cloud services, music and information to non-GST-registered individuals in the country will have to pay goods and services tax. The compliance burden for these service providers will rise significantly as they have to register for GST purposes, remit taxes, and file returns.
The move follows the Finance Act, 2023, which amendments the Integrated GST Act to revise the definition of 'non-taxable online recipient' to broaden the scope of Online Information and Database Access or Retrieval Services. A non-taxable online recipient would include any unregistered person receiving OIDAR services, regardless of the purpose, and located in India's taxable territory.
services from OIDAR providers located in non-taxable territory and received by central government, state government, government authorities or individuals for any purpose other than business was exempted until now. This exemption will be phased out from October 1.
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