Key alert
Indian GST authorities have significantly accelerated OIDAR enforcement in FY 2024–25. Foreign digital companies that have been operating in India without registration are now receiving Show Cause Notices — some with demands dating back to 2017.
What has changed
Since the introduction of OIDAR provisions under the IGST Act in 2017, enforcement was relatively limited. This changed significantly from 2023 onwards as CBIC (Central Board of Indirect Taxes and Customs) built data-sharing infrastructure with payment processors and app stores.
OIDAR provisions introduced
Section 14 of IGST Act — OIDAR rules come into force with GST launch. Limited enforcement in early years.
First wave of SCNs
CBIC begins issuing notices to large foreign streaming and SaaS platforms. Mostly large-cap companies targeted.
Data-sharing programme begins
CBIC establishes data exchange with payment gateways and app stores. Intelligence on foreign digital revenue builds significantly.
Mid-market companies targeted
Enforcement expands beyond large platforms. Mid-size SaaS, EdTech, and gaming companies begin receiving notices.
Significant escalation
Volume of SCNs increases substantially. Retrospective demands going back to 2017 issued. Smaller companies now in scope.
Active enforcement across sectors
All categories of foreign digital providers — SaaS, streaming, EdTech, APIs, marketplaces — now actively monitored and targeted.
How CBIC identifies non-compliant companies
Foreign digital companies often assume they are invisible to Indian tax authorities. This assumption is increasingly incorrect. CBIC uses multiple intelligence channels:
Who is being targeted
SaaS platforms
Subscription-based software with Indian user bases are primary targets in 2024–25.
EdTech companies
Online learning platforms with significant Indian student populations increasingly in CBIC crosshairs. Dedicated guide →
Gaming platforms
Online gaming is now a materially bigger issue than general enforcement — real-money gaming is banned outright since May 2026, with confirmed retrospective 28% GST. Read the full picture →
API & cloud services
B2B API providers increasingly targeted as Indian corporate customers disclose supplier details under RCM. Dedicated guide →
The retrospective demand risk
Perhaps the most significant enforcement development is the issuance of retrospective demands. Several companies have received demands covering periods going back to July 2017 — when OIDAR provisions first came into force. A company that has been serving Indian customers for 7 years without registration could face:
Example retrospective exposure
Company with USD 500K annual India B2C revenue since 2017: 7 years × 18% GST × USD 500K = USD 630K in tax, plus 18% per annum interest, plus penalties. Total exposure could exceed USD 1M. Get a specific estimate for your own numbers with our free penalty & exposure calculator.
What to do right now
Assess your India revenue
Identify all revenue from Indian customers — B2C and B2B — going back to your first India sale.
Determine OIDAR applicability
Confirm whether your service qualifies as OIDAR and which transactions attract the 18% IGST obligation.
Register immediately if not registered
Voluntary registration before receiving a notice significantly improves your negotiating position with CBIC.
Consider voluntary disclosure
In some cases, proactive disclosure and payment of arrears reduces penalty exposure. Get specialist advice before acting.
If you've received a notice — act immediately
Do not ignore SCNs. A 30-day response deadline starts from receipt. Engage a specialist within 24 hours — see our full GST Notice Response Guide for exactly what to do.
Voluntary registration vs enforcement notice
Companies that register voluntarily before receiving a notice generally face significantly lower penalties and have more flexibility in resolving retrospective liabilities. Acting now is almost always better than waiting.
Don't wait for a notice to arrive
Book a free 15-min call. We'll assess your exposure and tell you exactly what to do — at no cost.
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