Executive summary
Distribution in India increasingly runs through partners rather than direct signup. That changes a question most foreign suppliers think they have already answered: who is making the supply?
- Bundling does not remove the supply. A user receiving your service at no extra charge still receives a supply; the question is who supplied it.
- The label in the contract does not decide it. India looks at conduct — terms, pricing control, payment flow, and who the customer thinks they are dealing with.
- Three models, three answers. Resale, facilitation and referral produce materially different GST outcomes.
- Silence in the contract is the worst outcome, because both sides assume the other is handling it.
Why bundles are different from direct sales
A direct subscription has one supply and one supplier. A bundle can have two of each, and the second is easy to miss.
When an Indian consumer subscribes to your product on your website, the analysis is settled: you supply an OIDAR service to a person in India, and if they are unregistered you charge 18% and file. Introduce a distribution partner and there are potentially two supplies — one from you to the partner, and one from the partner to the end user — each with its own place of supply, its own value and its own liable party.
The three distribution models
Most India arrangements reduce to one of these. Identify which one you are in before the contract is signed.
| Model | What happens commercially | GST consequence |
|---|---|---|
| Resale / bundle | The partner buys access and includes it in its own plan. It sets the price to the end user and bills them. | Your supply is to the partner. With a valid GSTIN, reverse charge applies and you do not collect. The partner handles the downstream supply. |
| Facilitation | The partner lists or hosts your product; the end user is clearly contracting with you. Payment may route through the partner. | Your supply is to the end user and remains OIDAR. Whether the platform is a deemed supplier turns on the conduct test. |
| Referral | The partner directs users to you and is paid a fee. You contract with and bill the user directly. | Your supply is to the end user — plain OIDAR. The referral fee is a separate inbound supply to you. |
What the contract must settle
Four clauses that cost nothing at signature and a great deal to argue about later.
- Who supplies the end user. State it expressly, consistently with how the arrangement actually operates.
- Who registers, charges and remits Indian GST on the supply to the end user, and from what date.
- Whether prices are inclusive or exclusive of Indian GST, and who absorbs a change in treatment.
- Who holds the records — user counts by period, GSTIN capture, State-level data — and who produces them if either party faces an enquiry.
Checklist
Before signing an India distribution or bundling agreement.
- Identify which of the three models the arrangement actually is, on conduct rather than label
- Name the supplier to the end user expressly in the contract
- Allocate registration, collection and remittance, with effective dates
- State whether prices are GST-inclusive and who bears a change in treatment
- Agree who keeps period-level records and who produces them in an enquiry
- Confirm your own OIDAR position for any users you still contract with directly — applicability checker
Common questions
Our AI product is bundled free with an Indian telecom plan. Who pays the GST?
It depends on what the telecom is actually doing, not on the word used in the contract. If the carrier buys access from you and resells or bundles it as part of its own offering, the supply to the end user is the carrier's and your supply is to the carrier — a business-to-business supply where the carrier's GSTIN brings reverse charge into play. If instead the carrier markets your service while you continue to contract with and bill the end user, the supply to that user remains yours and remains OIDAR. The end user receiving it at no additional charge does not remove the supply; it changes who paid for it.
Does an app store or marketplace become the supplier automatically?
No. India applies a conduct-based test rather than an automatic rule, looking at who sets the terms, who controls pricing, who handles payment and who the customer understands they are contracting with. A platform can be treated as the deemed supplier where its role is substantive, in which case the obligation to charge and remit may sit with it. But that outcome is not guaranteed by the presence of a marketplace in the chain, and assuming it is leaves the obligation unattended on both sides. Where the platform is only a facilitator, the underlying supply remains yours.