Executive summary
Marketplaces, app stores, and ad platforms get OIDAR wrong in a specific, predictable way: assuming that because they "just" host or facilitate a transaction, someone else carries the tax liability. Often, that assumption is incorrect. If you haven't yet confirmed whether OIDAR applies to your business at all, our applicability checker is a good starting point before working through the platform-specific analysis below.
- OIDAR and marketplace/e-commerce rules are legally distinct — OIDAR taxes you for delivering your own digital service; marketplace rules govern platforms that facilitate someone else's supply.
- An "intermediary" under Section 2(13) of the CGST Act is someone who arranges or facilitates a supply without supplying on their own account.
- To remain a genuine intermediary — and avoid being treated as the supplier yourself — four specific conditions must all be satisfied. Failing even one flips you into being the deemed supplier, directly liable for GST.
- Online advertising is explicitly named in the OIDAR definition itself (Section 2(17)) — this is not a grey area or an analogy, it's a listed example.
- Many platforms are hybrid — an app store's own subscription revenue may be OIDAR, while third-party app sales on the same platform follow separate marketplace rules.
- A major, current amendment (30 March 2026) removed the old rule that taxed an intermediary's own fee based on the intermediary's location — it's now taxed based on the recipient's location instead. This changes where a genuine intermediary's fee is taxed, not who counts as one. See Section 4.
OIDAR vs marketplace rules: the core distinction
These two regimes get confused constantly because, from a user's screen, they look identical — someone pays online, something digital is delivered. Underneath, the legal analysis is entirely different.
| OIDAR | Marketplace / e-commerce operator rules | |
|---|---|---|
| What's being taxed | Your own digital service, delivered directly | A third party's supply, which you merely facilitate |
| Governing provision | Section 2(17), IGST Act | Section 2(13) (intermediary) and e-commerce operator provisions |
| Typical example | Streaming, SaaS, cloud storage, online advertising sold directly | An app store hosting third-party developer apps; a marketplace connecting independent sellers to buyers |
| Who's liable | You, the direct supplier | Depends entirely on the four-condition test in Section 3 |
The intermediary definition
Whether you're treated as a facilitator or a supplier starts with this statutory definition.
The final clause is the important one: the moment you supply on your own account, rather than merely arranging a supply between others, you fall outside the intermediary definition — regardless of what you call yourself commercially (a "platform," a "marketplace," an "aggregator").
The four-condition test
This is the test that actually decides your liability. All four conditions must hold for you to remain a genuine intermediary — miss even one, and you become the deemed supplier.
You do not authorise the charge
The platform must not control or approve the customer's payment — that authority sits with the underlying service provider.
You do not set the general terms and conditions
Pricing and service terms must be determined by the underlying provider, not dictated by the platform.
You do not deliver or control service delivery
The platform must not influence how the underlying service is actually performed or delivered to the customer.
You do not collect or process payment
Payment must not be routed through or handled by the platform itself.
Most modern platform business models — for good commercial reasons — centralise payment processing and set at least some platform-wide terms. That commercial logic directly conflicts with the legal conditions for remaining a pure intermediary. Assume you'll be treated as the deemed supplier unless you can specifically demonstrate all four conditions hold.
March 2026: Section 13(8)(b) omitted — a major, current change
This is a genuinely significant, very recent amendment — worth understanding precisely, because it's easy to over-apply it to questions it doesn't actually answer.
What this does not change
It's worth being precise here, because this amendment is easy to over-read. It changes where an intermediary's own fee is taxed — it does not touch:
- The Section 2(13) definition of who qualifies as an intermediary in the first place
- The four-condition test from Section 3 of this guide, which determines whether a platform is a genuine intermediary or a deemed supplier
- Your OIDAR obligations as a direct digital-service supplier, if that's what you are
Who this actually affects
Given this site's audience — foreign digital companies with India-facing obligations — this amendment's direct relevance is narrower than the headline suggests, but it's genuinely important in specific situations:
- If you engage an Indian agent, broker, or distributor to help you enter or navigate the Indian market, and you pay them a facilitation fee: post-amendment, since you (the recipient) are outside India, that Indian intermediary's service to you can now qualify as their export — this is good news for them, and doesn't create new obligations for you.
- If you have an Indian subsidiary or group entity that itself engages foreign agents or intermediaries for its own purposes (sourcing, deal-facilitation, marketing): that Indian entity is now the recipient of a service with place of supply in India, meaning it must self-assess and pay 18% IGST under reverse charge, with a self-invoice under Section 31(3)(f) of the CGST Rules. This is a new compliance point worth flagging to your India-based team or subsidiary if this describes your structure.
- If you are not using any Indian or foreign intermediary relationships at all — a typical direct-to-consumer or direct-to-business OIDAR supplier — this amendment doesn't change your core compliance position. Your relevance to it is background awareness, not a new obligation.
This is a real, current, significant change to Indian GST law — but it answers a different question from the one most of this guide addresses. Whether you're an intermediary or a deemed supplier is unchanged; what's changed is where a genuine intermediary's own fee gets taxed.
Advertising platforms specifically
Unlike some of the classification questions elsewhere on this site, this one has no ambiguity at all.
Where it gets more nuanced is programmatic advertising involving multiple intermediary ad-tech platforms between the advertiser and the publisher. Each party in that chain needs to independently assess whether they're supplying their own service (ad space, targeting technology, measurement) or merely facilitating a transaction between other parties — the same intermediary analysis from Sections 2–3 applies at each link in the chain.
Hybrid platforms: when you're both
Many real platforms aren't purely one thing or the other — and the two parts of the same business can have entirely different GST treatment.
- Your own direct digital service (subscriptions, premium tiers, your own content or software) → assess as OIDAR, same as any other direct digital supplier
- Third-party transactions you facilitate (marketplace sales, third-party app purchases, third-party ad inventory) → assess separately under the four-condition intermediary test
Worked scenarios
A foreign app marketplace with its own premium subscription plus third-party app sales
The platform processes all payments centrally (including for third-party app purchases), sets minimum pricing rules for the store, and controls how apps are delivered and updated. Its own premium ad-free subscription is sold directly to users.
The premium subscription is straightforward OIDAR — a direct digital service. For third-party app sales, the platform fails at least three of the four intermediary conditions (payment processing, terms-setting, delivery control) — it is very likely the deemed supplier for those transactions too, not just its own subscription revenue.
A programmatic ad exchange connecting foreign advertisers to Indian publishers
The exchange sets a minimum price floor, handles all billing centrally, and provides the ad-serving technology that determines which ad actually displays. Advertisers and publishers never interact directly or negotiate terms themselves.
Despite sitting "in the middle," the exchange fails the terms-setting, delivery-control, and payment-processing conditions. It is the deemed supplier of the advertising service to the extent it operates this way — advertising being explicitly named in the OIDAR definition strengthens rather than weakens this conclusion.
A marketplace that only lists independent sellers, who set their own prices and handle their own payment and delivery directly with buyers
The platform earns a listing fee only, has no role in pricing, doesn't process transaction payments, and doesn't control how sellers deliver their services.
This structure satisfies all four conditions — the platform is a genuine intermediary. Its own listing-fee revenue may itself be a taxable service to the sellers (worth its own separate assessment), but the underlying seller-to-buyer transactions are not the platform's GST liability.
Practical checklist
- Separate your own direct digital services from third-party facilitated transactions — assess each independently
- For direct services, apply standard OIDAR analysis (Section 2(17), B2B/B2C classification, place of supply)
- For facilitated transactions, test against all four intermediary conditions specifically — don't rely on your business's commercial self-description
- If you fail any one condition, plan for deemed-supplier GST liability on that revenue stream, not just your facilitation fee
- For advertising specifically, remember it's explicitly named in the OIDAR definition — there's no threshold argument to make there
- In multi-party ad-tech chains, assess your specific role at each link, not your general position "in the middle"
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 →
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