Online Information and Database Access or Retrieval (OIDAR) services

About Online Information and Database Access or Retrieval (OIDAR) services:

• It is a category of services provided through the medium of the internet, and received by the recipient online without having any physical interface with the supplier of such services.
• OIDAR services, delivered over the internet or electronic networks, are highly dependent on information technology and include offerings such as cloud services, digital content, online gaming, and online advertising.
• When such services are provided by an offshore entity to a non-taxable recipient, the supplier becomes liable for obtaining registration and discharging GST on the same.
• Criteria to determine an OIDAR Service

• These are the services whose delivery is mediated by information technology over the internet/electronic network and Services are automated and impossible to ensure in the absence of internet technology.

• Currently, as many as 574 offshore entities providing OIDAR Services have registered themselves with the GST department, and annual revenue from this sector has increased from Rs 80 crore for the FY 2017-18 to Rs 2,675 crore for 2023-24 fiscal.
• According to DGGI in its annual report noted that since the OIDAR service providers are located abroad it becomes a challenge in GST enforcement and hence the sector remains relatively untapped and holds tremendous revenue potential.