GST

GSTR-5A: GST for Non-Resident OIDAR Service Providers

GSTR-5A: GST for Non-Resident OIDAR Service Providers

In the era of globalization, trade is not bound by the national precincts. Technology has helped businesses to transverse the borders of their own country, and they are no longer bound by their nationalities, which basically means their market is where their buyer is. In a way, it won’t be an exaggeration to say that the world has indeed become smaller. From the comforts of your home, you can have access to goods or services across the world without getting in physical contact with the suppliers. But are these kinds of services also covered under the ambit of taxation? In this article, we will delve into the details regarding GST pertaining to non-resident OIDAR Service Providers and see who will bear the tax burden in case of services provided by these non-resident OIDAR Service Providers. We will also discuss the mandatory requirement relating to form GSTR-5A, along with a step-by-step guide to filling out the form online.

Concept of OIDAR

Before jumping right into the details, let us first try to understand what the concept of OIDAR is. OIDAR refers to Online Information and Database Access or Retrieval, which is essentially a service provided by using the Internet without having access to any physical interface with the recipient.

Meaning of OIDAR

As discussed, technology has changed the way services operate. They are no longer restricted within the national precincts. Owing to technological developments, services can be offered to people across borders, and the most common way to do that is through Online Information and Database Access or Retrieval (OIDAR) Service Providers. In simpler words, we can say that OIDAR services are services rendered by exploiting the Internet as a medium.

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Therefore, these are the services received by a person online without any physical access or interaction with the service provider and are almost like downloading a file or a PDF.

Examples of OIDAR

Some of the examples of OIDAR are:

  • Cloud Services.
  • Online Gaming Services.
  • Providing Digital Content such as music, videos, etc.
  • Online Education, Training, and other courses.
  • Providing Digital Data Storage Services.
  • Providing Search Engine Services.

OIDAR under GST

The OIDAR has been chosen to be covered under the ambit and scope of GST so that the domestic service providers also have an equal option and a level playing field in terms of cost. Thus, under GST, all OIDAR services are taxed, whether provided from within the country or outside. In fact, if they do not have a place of business located in India, they are required to appoint an agent in India to handle the matters concerning tax.

It is noteworthy that GST is applicable only on the ‘supply’ of these services, and in the case of OIDAR, as the name suggests, the recipient of services is located in India. However, the provider of services is not.

Registration under GST

The GST law mandates registering for GST if the businesses surpass certain threshold limits of the annual turnover provided by the government. However, the implication of taxes is different for the OIDAR Service Providers.

Who must register under GST for OIDAR Services?

It is mandatory for all OIDAR Service Providers in India to register under GST, regardless of their turnover and the authorities have prescribed a form GSTR-5A which is required to be filed by the OIDAR Service Providers who are giving services to unregistered service recipients in India. This means that OIDAR Service Providers are directly supplying services to a recipient who is unregistered in India, then these OIDAR Service Providers are required to get registered under GST and are thus liable to pay taxes.

In case they provide services with the help of intermediaries, then such intermediary is required to get registered and pay taxes.

Two categories of OIDAR Service Recipients

There are two types of service recipients:

Ø Registered Persons

In the case of registered recipients, a reverse charge is applied to the taxes owed by the person. Thus, the recipient is responsible for paying the taxes in such a case, and as discussed, the taxes will be payable through a reverse charge mechanism, and returns are required to be filed by them only.

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Ø Unregistered Persons/Government/Local Authorities

In case the OIDAR services are received by unregistered recipients, the government, or any local authority, then in that case it is the service provider who is liable to file returns and pay GST to the government. It is noteworthy that services are provided for non-commercial purposes.

GSTR-5A

As discussed above, when OIDAR Services are provided to unregistered entities, government, or local authorities, it is the responsibility of the service providers in that case to pay the tax by filing the returns.

Form GSTR-5A

The law mandates the service providers to furnish all the details in return before the prescribed deadlines. The authorities have prescribed a format to file returns in the form of GSTR-5A.

NIL GSTR-5A

In case no business transaction has been recorded by the service provider during a particular month. Then in that case such a service provider is required to file a NIL GSTR-5A.

Difference between GSTR-5 and GSTR-5A

GSTR-5 is a return filed by non-resident persons who do not have a fixed place of business in India and are only here for a limited period of time to do business, whereas GSTR-5A is the return required to be filed by non-resident OIDAR Service Providers and is required to be filed on a monthly basis. It is a mandatory requirement that must be complied with even when there has been no business transaction, whereas there is no such requirement qua GSTR-5.

Due Date for Filing GSTR-5A

GSTR-5A is a form mandated by the authorities to be filed by the Non-Resident Service Providers or Online Information and Database Access or Retrieval Service Providers, every month, regardless of the transactions.

Due Date

The due date for filing GSTR-5A by the Non-Resident OIDAR Service Providers is the 20th of the succeeding month. For instance, for the month of June, the due date for filing GSTR-5 will be the 20th of July.

Consequences for the delay in filing GSTR-5A

A delay in filing of GSTR-5A may attract adverse consequences and the following pecuniary penalties:

Type of ReturnPenalty
Normal ReturnRs. 200/ day
NIL ReturnRs. 100/ day

Prerequisites for Filing GSTR-5A

There are certain prerequisites that must be adhered to while filing GSTR-5A. These are:

  • The applicant must be registered under GST and must have a GSTIN.
  • The applicant must be registered as an OIDAR.
  • The return can be filed only after paying the tax amount or discharging any other liabilities.
  • The return for the current period can be filed only after the return for the previous tax period has been filed.
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How to File GSTR-5A

In order to file GSTR-5A, simply undertake the following steps:

  • Login to your GST Portal1 using your credentials
  • Navigate to the “Services” Tab
  • Select “Returns” and click on “Returns Dashboard” to file GSTR-5A

Details to be filed in GSTR-5A

The form GSTR-5A is comprised of seven tables, in which the following details are required to be furnished by the applicants:

TableTitleDetails to be furnished
Table 1GSTINs of SuppliersHere, the supplier is required to furnish his GSTIN.
Table 2Legal Name and Trade NameThe name of the registered taxpayer and trade name, if any, is to be provided here.
Table 3Particulars of the authorized person in India who will file the returnThe name and details of the legal and authorized representative in India who’s furnishing the return, are to be provided under this table.
Table 4The month and year for which the return is to be filedMention the period and the month for which the return is being furnished.
Table 5Information regarding taxable Outward Supplies in IndiaThe details pertaining to taxable outward supplies made to the recipients in India are to be mentioned here, such as tax rate, cess, place of supply, etc.
Table 5AAmending taxable Outward Supplies made to non-taxable persons in IndiaThe details pertaining to modifications made to the taxable outward supplies made to non-taxable persons in India are to be specified here. This table also allows you to add or delete any taxable value or correct rate. However, it must be noted that the place of supply cannot be revised.
Table 6Interest, Penalty, or any other amountThe details regarding interest due or any penalty imposed for failure to adhere to deadlines, etc., will be furnished here.
Table 7Tax Interest, Late Fee, and any other amount payableAny Interest is payable on late filing of the form, and the Late fee payable on late filing of the return should be mentioned here.

 Once the Form GSTR-5A has been successfully submitted, the taxpayer will receive an acknowledgement in the form of an Acknowledgment Registration Number, which must be saved for future reference, and an acknowledgement email and message will also be forwarded to your registered number.

Conclusion

With the advent of technology, goods or services can now transverse the national borders. Businesses are no longer constrained by the physical barriers. With the use of the Internet, non-residents are now able to provide services to customers in India and are able to generate high revenues. So it is only fair that these be brought under the ambit of GST as well, as this will ensure that the domestic players also get an equal opportunity and a level playing field in terms of cost. Thus, the concerned authorities have mandated certain OIDAR Service Providers to register under GST and file their monthly returns, irrespective of whether any business transaction has taken place or not. These returns are required to be filed in the form of GSTR-5A. The authorities have made the entire process easily accessible and simple to comprehend; however, if you are still caught in the web of intricate web taxation, you may take expert advice or hire professional help.

If you wish to know more regarding GST Returns, then you may contact Enterslice.

FAQs:

  1. Who needs to file GSTR-5A? Is it mandatory to file Form GSTR-5A?

    GSTR-5A is required to be filed by the Non-Resident OIDAR Service Providers, and Yes, filing GSTR-5A is mandatory, and it is required to be filed even if there has been no business transaction during that particular month.

  2. Are all OIDAR Service Providers required to file GSTR-5A?

    No, only non-resident OIDAR Service Providers that are providing services to unregistered entities or government or local authorities are required to file GSTR-5A.

  3. What is a non-resident online service provider in GST?

    Any online information and database access or retrieval services provider supplying these services from a place of business outside Indian territory to a recipient in India is referred to as a non-resident online service provider.

  4. Can OIDAR Service Provider claim ITC?

    No, a service provider who is registered as OIDAR cannot claim ITC in the returns.

  5. Who is liable to file GSTR-5A?

    Non-Resident Online Information and Database Access or Retrieval (OIDAR) services provider needs to file a return in Form GSTR-5A.

  6. Can I reset Form GSTR-5A after filing?

    No, you cannot reset the form GSTR-5A after filing. However, you can edit the details till the final submission.

References

  1. https://www.gst.gov.in/

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