OIDAR GST in India:
A Guide for UK Companies

Executive summary

Genuinely major UK-India trade news is landing right now — and none of it changes whether you need to register for OIDAR GST. Worth being precise about why.

CETA: what it changes, and what it doesn't

This is worth addressing directly, given the timing — CETA is dominating UK-India business news right now, for good reason.

The concept you already know: UK digital VAT

UK companies have a real advantage here — you likely already operate a regime built on the same logic as OIDAR, just aimed at different countries.

The specific mechanics differ — India's two-indicator place-of-supply test, the 18% flat rate, monthly GSTR-5A filing — but the conceptual model (tax follows the customer's location, registration is mandatory regardless of scale) is one your team has almost certainly already built processes around, just for a different set of countries.

Your £90,000 threshold does not apply here

This is a specific, easy mistake worth naming directly.

This mistake is specific to companies from jurisdictions that do have a domestic threshold (like the UK's own VAT system) — the assumption is reasonable, just incorrect when applied to India. Note that the UK's own digital-services VAT rules for overseas suppliers into the UK also have no threshold, so this is genuinely an "different rules for outbound vs a reasonable inbound assumption" mismatch, not a contradiction in how the UK itself treats the same scenario in reverse.

The UK-India tax treaty is a separate matter too

The same distinction that applies to CETA applies to the UK-India Double Taxation Avoidance Agreement — just for direct tax rather than trade.

The UK-India DTAA governs income tax — withholding rates on royalties, fees for technical services, and permanent establishment questions. It's genuinely important if your company has India-sourced income streams, but it operates on an entirely separate track from OIDAR GST, which is an indirect consumption tax. Being fully compliant on your DTAA position — claiming the right treaty rates, managing PE risk — tells you nothing about your OIDAR position, and vice versa.

Checklist

Common questions

Do UK 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