Digital entertainment industry is thriving in India. However, you must also know that the entertainment industry is also not free of taxes. Discover how GST affects your favorite entertainment apps in India in this straightforward article.
Online supplies of digital content, like music, movies, and TV shows, are called OIDAR services.
OIDAR stands for Online Information Database Access and Retrieval services.
You can also call these apps OTT apps or Entertainment apps in India.
Taxation of Entertainment Apps through GST in India
Case 1: Both Service Supplier and Service Recipient are in India
In this case, if the service provider (the one giving the digital content) is based in India, they must have GST Registration and charge 18% GST to the person receiving the service.
So, if you are in India and you buy digital content from a provider also in India, you will pay 18% GST on top of the service cost.
Case 2: Service Supplier is outside India, and Service Recipient is in India
If the service provider is outside India, and the person receiving the service is in India, GST rules apply differently depending on whether the person receiving the service is a business or not.
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Service Recipient is a Business entity registered under GST
In this situation, the business receiving the service must pay the GST. This is called the Reverse Charge Mechanism. They are responsible for calculating and paying the GST to the government.
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Service Recipient is not registered under GST
If the person receiving the service is not registered under GST, the service provider from outside India must register for GST in India. They need to collect the GST from the person receiving the service and then send it to the government through GST Return Filing.
Latest Update of GST Exemption Revoked for Overseas Online Service Providers
- India to impose GST on overseas OIDAR service providers from October 1, 2023.
- This means that companies like Facebook, Google, and many educational and entertainment technology platforms will now have to pay a GST of up to 18% on the services they provide to both individuals and government bodies.
- Prior to this, OIDAR services provided by foreign companies to the Indian government or individuals for non-commercial purposes were exempt from GST.
GST Registration for OIDAR Service Provider
- In India: OIDAR service providers in India can apply for GST Registration through the GST portal.
- Outside India: OIDAR service providers outside India serving Indian residents must comply with GST regulations. They can obtain GST registration by filing GST REG-10 electronically, along with necessary documents.
Important GST Compliance and Due Dates for OIDAR or Entertainment Apps in India
- For OIDAR Providers in India: They should file GSTR-1, GSTR-2, GSTR-3, and annual GST returns like regular taxpayers, subject to an 18% GST rate.
- For OIDAR Providers Outside India: They must file Form GSTR-5A by the 20th of each month. An Indian representative ensures GST compliance.
- Form GSTR-5A includes:
- Details of taxable supplies to Indian consumers (location, tax rate, value, IGST, Cess).
- Calculation of interest, penalties, and other dues.
- Tax, interest, late fees, and payments made.
GST on online gaming, casinos and horse racing to be 28% or higher
Moreover, If you want any other guidance relating to E-Gaming Companies against GST demand in court, please feel free to talk to our business advisors at 8881-069-069.
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