OIDAR + CROSS-BORDER DIGITAL SERVICES

H.1 — Netflix to Delhi individual subscriber

Facts: Netflix US supplies streaming to Delhi individual subscriber Rs. 500/month.

Computation / Steps:

Step 1. OIDAR per s. 2(17) IGST.

Step 2. Subscriber = non-taxable online recipient per s. 2(16) (post FA 2023 broadened scope — any unregistered).

Step 3. POS per s. 13(12) — recipient location India.

Step 4. s. 14 IGST simplified scheme — Netflix as foreign supplier registers + pays.

Step 5. IGST 18% = Rs. 90/month.

Step 6. Subscriber pays Rs. 590 inclusive.

Step 7. Netflix files GSTR-5A monthly.

Result: OIDAR B2C — foreign supplier pays via simplified scheme. IGST 18%.

H.2 — Foreign cloud service to Indian registered business — RCM

Facts: Microsoft Azure US supplies cloud services Rs. 5 lakh to Delhi registered company.

Computation / Steps:

Step 1. OIDAR but recipient is registered (not 'non-taxable online recipient').

Step 2. RCM under s. 5(3) IGST.

Step 3. Delhi company pays IGST 18% = Rs. 90,000 on RCM.

Step 4. Self-invoice + ITC.

Step 5. Microsoft does not register under s. 14 for this supply (different from B2C).

Result: OIDAR B2B — RCM on Indian registered recipient. Different from B2C s. 14 framework.

H.3 — Indian IT export to US subsidiary

Facts: Delhi IT subsidiary of US parent provides software development to US parent Rs. 5 cr annually.

Computation / Steps:

Step 1. Per s. 13(2) — POS = recipient location US.

Step 2. Apply intermediary test per Circular 159/2021 — Delhi subsidiary provides on own account (not arranging between parties) → NOT intermediary.

Step 3. Apply distinct-person test per s. 2(6)(v) — Delhi subsidiary and US parent are separate legal persons per Circular 161/2021.

Step 4. Qualifies as export of services under s. 2(6).

Step 5. Zero-rated under s. 16; LUT route preferred.

Result: Export of services qualifies; subsidiary-parent treated as separate legal persons. LUT route + ITC refund.

H.4 — Online gaming platform post 01.10.2023 framework

Facts: Foreign gaming platform serves Indian users; bet face value Rs. 1 cr/month.

Computation / Steps:

Step 1. Post 01.10.2023 — online gaming = OIDAR + 28% GST + 28% Compensation Cess on full face value.

Step 2. Foreign platform registers under s. 14 IGST + Compensation Cess framework.

Step 3. Pays 28% IGST + 28% Cess on Rs. 1 cr face value = Rs. 56 lakh tax/month.

Step 4. Monthly GSTR-5A filing.

Step 5. Major compliance burden for foreign gaming platforms.

Result: Foreign gaming post-01.10.2023 — substantial tax burden; full face value taxed.