Section 13(12): OIDAR and the Seven Indicators

Section 13 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The rule that decides whether a foreign digital service is taxed in India — and a deeming Explanation that turns the question into an evidence exercise.

Section 13(12): the place of supply of online information and database access or retrieval services shall be the location of the recipient of services. The Explanation: a person receiving such services shall be deemed to be located in the taxable territory if any two of the following non-contradictory conditions are satisfied — (a) the address presented by the recipient through internet is in the taxable territory; (b) the card by which payment is settled — credit, debit, store value, charge or smart card — has been issued in the taxable territory; (c) the billing address is in the taxable territory; (d) the internet protocol address of the device used is in the taxable territory; (e) the bank in which the account used for payment is maintained is in the taxable territory; (f) the country code of the SIM card used is of the taxable territory; (g) the fixed land line through which the service is received is in the taxable territory.

What OIDAR is

Section 2(17) of the IGST Act: services whose delivery is mediated by information technology over the internet or an electronic network, the nature of which renders their supply impossible to ensure in the absence of information technology, and which includes electronic services such as advertising on the internet and the other categories the definition lists.

The test is the middle limb. Not merely delivered electronically — impossible to supply without information technology.

So the dividing line runs between:

• automated, content-driven supply — a software download, a streaming subscription, cloud storage, an automated database, an online game: OIDAR;
• human-mediated supply that merely uses the internet as a channel — a live instructor-led class, a consultancy delivered by email, professional advice over video: arguably not OIDAR, and determined by s.13(2) or another sub-section.

The characterisation decides the regime, not just the sub-section — because an OIDAR supplier outside India supplying to a non-taxable online recipient falls under s.14, with its own simplified registration and payment mechanism. Section 14 IGST →

The seven indicators, and how they work

"Any two of the following non-contradictory conditions."

Two features of that formula.

Only two are needed. A supplier does not have to establish the recipient's location definitively; two indicators suffice.

They must be non-contradictory. Two indicators pointing to India, with a third pointing elsewhere, is not automatically fatal — the requirement is that the two relied on do not contradict each other. But a supplier relying on two while holding a third that flatly contradicts them is in a weak position.

What each indicator is, in practice:

The design is practical. A foreign digital supplier serving millions of consumers cannot investigate each one's residence. The Explanation lets it rely on data it already captures in the ordinary course — IP, card BIN, billing address — and deems the recipient located in India where two of them agree.

Why it matters to a foreign supplier

If the recipient is deemed to be in India, the place of supply under s.13(12) is India, and the supply is taxable here.

The next question is who pays, and it turns on the recipient:

Recipient is a registered person in India — the supply is an import of services under s.2(11), taxable under reverse charge, with the Indian recipient issuing a self-invoice under s.31(3)(f) and the sixty-day rule in s.13(3) of the CGST Act fixing the time of supply. The sixty-day rule →

Recipient is a "non-taxable online recipient" — s.2(16) of the IGST Act, as substituted by the Finance Act, 2023, notified through Notification No. 28/2023-CT dated 31.07.2023, defines it as any unregistered person receiving OIDAR services located in taxable territory. In that case the foreign supplier is liable, under the s.14 mechanism.

The 2023 substitution widened it considerably. The earlier definition was framed around a recipient receiving the services otherwise than for commerce, industry or any other business or profession — so a business recipient was excluded. The substituted definition covers any unregistered person in the taxable territory, whatever the purpose. So a foreign OIDAR supplier now has a much larger population of recipients for whom it must account.

What the supplier has to build

Data capture, at the transaction:

1. IP address, logged and retained;
2. billing address, including country;
3. card issuing country from the BIN, or the payment account's country;
4. SIM country code where the service is mobile-billed;
5. the address presented at sign-up.

Determination logic:

1. Evaluate the indicators, identify two non-contradictory ones, and record which two were relied on;
2. Flag contradictions for review rather than resolving them silently;
3. Check whether the recipient supplied a GSTIN — which takes the supply out of the s.14 mechanism into reverse charge by the recipient.

Records:

1. Retain the indicator data for the s.36 retention period — seventy-two months from the due date of the annual return — because a determination made on two indicators is only as good as the evidence that they existed. Document retention →

Section 14A: online money gaming

Section 14A of the IGST Act provides a special mechanism for the supply of online money gaming from outside India to a person in India, with its own registration and payment requirements, and consequences for non-compliance.

It sits alongside s.14 rather than within it — the two mechanisms address different supplies, and a supplier of online money gaming from outside India is governed by s.14A specifically. Section 14A IGST →

The place-of-supply analysis in s.13(12) and its Explanation is common ground, but the collection mechanism differs, so the correct provision has to be identified before the compliance obligations can be worked out.

Key takeaways

• OIDAR turns on whether supply is impossible without information technology — automated supply is in; human-mediated delivery over the internet arguably is not.
• Section 13(12) places OIDAR at the recipient's location.
• The Explanation deems the recipient to be in India on any two non-contradictory of seven indicators.
• The indicators are all data a supplier already captures — IP, card BIN, billing address, bank, SIM, land line.
• Section 2(16) was substituted in 2023 to cover any unregistered person, widening the foreign supplier's obligations.
• A registered Indian recipient pays under reverse charge; otherwise the foreign supplier accounts under s.14 — or s.14A for online money gaming.

Read next

• Section 13(2): The Default Cross-Border Rule
• Section 14 of IGST Act 2017 — OIDAR Services
• Section 14A of IGST Act 2017 — Online Money Gaming
• The Sixty-Day Rule: Reverse Charge Time of Supply

Disclaimer: Positions stated as on 5 September 2026, based on the IGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition). The characterisation of a particular digital service as OIDAR depends on its actual delivery mechanics.