Key takeaways
- Foreign suppliers of online services to unregistered Indian customers register via GST REG-10 and charge 18% IGST.
- Since 1 October 2023 the OIDAR net covers any unregistered recipient, including unregistered businesses.
- Sales to GST-registered businesses are taxed under reverse charge; the equalisation levy has been abolished.
Who is caught
- Online information and database access or retrieval (OIDAR) services: SaaS, cloud services, apps, digital content, online advertising, e-learning and similar.
- Since 1 October 2023 the old “essentially automated, minimal human intervention” test was removed, and a non-taxable online recipient now means any unregistered person in India — including unregistered businesses, not just consumers.
Sales to consumers and unregistered businesses
- Register through the simplified Form GST REG-10 — no Indian entity needed.
- Charge 18% IGST and file GSTR-5A monthly by the 20th. No input tax credit.
- Appoint an Indian representative to pay tax if you have no presence in India.
Sales to GST-registered businesses
The Indian customer pays GST under reverse charge. Collect and check their GSTIN — that’s your evidence the sale is B2B.
What no longer applies
The 2% equalisation levy ended from 1 August 2024 and the 6% levy on online advertising from 1 April 2025. Income tax is separate: your treaty generally protects business profits unless you have a permanent establishment, though India also has significant economic presence rules.
Practical steps
- Add a GSTIN field at checkout and validate it.
- Price in INR or show tax-inclusive prices for Indian consumers.
- Keep location evidence (billing address, IP, payment country) for each Indian sale.
Sources
- ELP — OIDAR changes in Finance Act 2023
- India Briefing — abolition of the 2% equalisation levy
- BDO — 57th GST Council recommendations
Frequently asked questions
Does a foreign SaaS company need GST registration in India?
Yes, if it supplies online services to Indian consumers or unregistered businesses. It registers through the simplified Form GST REG-10, charges 18% IGST and files GSTR-5A monthly. Sales to GST-registered businesses are taxed under reverse charge instead.
What is OIDAR in GST?
Online information and database access or retrieval services — services delivered over the internet such as SaaS, cloud services, digital content and online ads. Since October 2023 the definition no longer requires the service to be essentially automated.
Is the equalisation levy still applicable in India?
No. The 2% levy on e-commerce supplies ended from 1 August 2024 and the 6% levy on online advertising from 1 April 2025.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.