Executive summary
Of every jurisdiction we cover, Canada creates a uniquely specific trap — not because the rules are unusually different, but because the shared name invites an assumption of familiarity that doesn't hold up.
- Canada's federal "GST" and India's "GST" are entirely separate taxes that happen to share an acronym — different statutes, different thresholds, different rates, different administering authorities.
- Canada's simplified GST/HST regime for non-resident digital suppliers applies once sales to Canadian consumers exceed CA$30,000 over 12 months. India's OIDAR has no threshold at all.
- Canada layers federal GST (5%) with provincial HST or PST, producing rates between 5% and 15% depending on the province. India applies a single national 18% IGST rate, with no provincial variation for the foreign supplier.
- Canada's simplified regime files quarterly and offers no input tax credits. India's GSTR-5A is monthly.
Same name, different tax
This is worth addressing before anything else, because it's a trap specific to Canadian companies in a way it isn't for any other jurisdiction on this site.
This is a more specific version of a pattern that shows up across every jurisdiction on this site — companies reasonably importing a home-market mental model into an India assessment — but Canada is the only market where the two taxes share an identical name, which makes the wrong assumption unusually easy to make without noticing you've made it.
Canada's CA$30,000 threshold vs India's zero
Once the naming confusion is out of the way, the substantive differences start with thresholds.
A layered system vs a single rate
Canada's own tax system is more complex than India's in one specific respect, which is worth understanding so you don't try to replicate that complexity where it isn't needed.
Canada's federal GST is 5%, but five provinces have harmonised their provincial sales tax with it into a combined Harmonized Sales Tax (HST) ranging from 13% to 15%, while other provinces layer a separate Provincial Sales Tax (PST) or, in Quebec, the Quebec Sales Tax (QST) on top of the federal GST. A non-resident digital seller into Canada needs to track which province each customer is in and apply the correct combined rate.
Filing cadence and the ITC trade-off
Two more operational differences worth planning around.
Filing cadence
Canada's simplified GST/HST regime for non-resident digital businesses files quarterly. India's GSTR-5A is monthly, due by the 20th of the following month, with mandatory nil returns even in months with no India activity. A compliance calendar built around Canada's quarterly rhythm will under-serve India's monthly cadence if not adjusted specifically.
No input tax credits under the simplified regime
Canada's simplified registration trades away input tax credits (ITCs) in exchange for a lighter compliance burden — no Business Number, no security deposit, simpler reporting. India's GSTR-5A framework works similarly in this respect: there is no input tax credit mechanism for OIDAR B2C supplies either, so the 18% you charge is remitted in full, without offset against your own India-related costs. If your company registered under Canada's simplified regime specifically to accept the no-ITC trade-off for a lighter compliance burden, India's framework doesn't actually offer you a choice — the no-ITC position is the only option for OIDAR B2C supplies.
Checklist
- Treat India's "GST" as an entirely separate tax from Canada's — don't let the shared name shortcut your assessment
- Discard the CA$30,000 threshold mental model — India has no equivalent
- Don't build province-style rate-variation logic for India — it's a single national 18% rate
- Reset your compliance calendar for India's monthly GSTR-5A cadence, separate from Canada's quarterly rhythm
- Price in the absence of input tax credits on your India revenue from the outset
- Use our applicability checker to confirm your specific position
Common questions
Do Canadian Companies have to pay tax in India?
If you sell digital services to customers in India, yes — but not income tax. The charge is GST, under India's OIDAR rules, and it applies to the sale rather than to your profits. There is no registration threshold: a single Indian consumer paying a small amount creates the obligation from that first sale. The rate is 18%. Where your Indian customer is a GST-registered business that gives you its GSTIN, the customer accounts for the tax instead under reverse charge and you do not collect it. Where the customer is a consumer or an unregistered business, you must register in India, charge 18%, and file a monthly return. Your home-country tax treaty does not remove this, because treaties cover income tax, not GST.
We have received an OIDAR GST notice from India — what should we do?
Treat it as time-bound. A Show Cause Notice carries a fixed response window, and if it passes without a reply the authority can decide the matter without hearing you, which is far harder to undo than it is to answer in time. Do not ignore it because your company has no Indian entity or presence — that does not limit the demand. Establish first what the notice actually is, since a routine enquiry, a DRC-01 and a Show Cause Notice carry different deadlines and consequences. Pull together your India revenue by period, your customer classification, and any GSTINs you captured, because the reply stands or falls on that evidence. Our notice response guidenotice response guide sets out the sequence in detail.
Glossary
A finance leader with over three decades in taxation, corporate governance, and cross-border advisory. Former Independent Director of Steel Authority of India (SAIL), a Maharatna PSU, and Independent Director of CSL Finance Limited, a listed NBFC. Read full profile →
Confident about Canadian GST, less sure about India's?
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