India: DGGI increases GST scrutiny of foreign digital service providers
India’s tax authorities are intensifying enforcement measures targeting foreign digital service providers that offer online services to Indian users without registering under the Goods and Services Tax (GST) system. The Directorate General of GST Intelligence (DGGI) is focusing on non-compliant entities under the expanded Online Information Database Access and Retrieval (OIDAR) rules introduced in October 2023.
Broader scope triggers compliance push
The revised OIDAR definition now covers a wide array of digital services delivered from outside India, including those related to virtual currencies, cloud computing, artificial intelligence, online content, advertising, and education. In light of these changes, the DGGI has identified several unregistered platforms that continue to serve Indian customers while avoiding GST obligations.
Enforcement actions underway
- The DGGI has initiated outreach to overseas digital service providers and their associated Indian entities by issuing formal communications, including notices and guidance letters.
- Domestic businesses that generate revenue for or cooperate with overseas platforms are being asked to provide relevant transaction details and support GST compliance efforts.
- Payment service providers in India have been directed to suspend transactions involving unregistered foreign entities.
- Authorities are also collecting financial data from banks and the central bank, and pursuing international cooperation through information-sharing arrangements.
Legislative developments and tax growth
Although current GST laws do not grant power to block access to non-compliant websites, the DGGI has sought new legislative authority to enable such enforcement tools.
Following the expansion of OIDAR provisions, GST collections from overseas digital services increased significantly—from ₹80 crore in 2017–18 to ₹2,675 crore in 2023–24. Experts attribute this growth to the removal of previous exclusions concerning human involvement and non-commercial use.
Registrations and ongoing investigations
To date, several hundred foreign companies have voluntarily registered under India’s OIDAR framework. Investigations into suspected non-compliance are ongoing, with some involving substantial tax demands currently under judicial review.
VAT/GST rates 2024 in Asia
| Country | Standard VAT/GST Rate | Reduced Rates |
| Armenia | The standard VAT rate is 20%. | |
| Azerbaijan | The standard VAT rate is 18%. | |
| Bahrain | From January 1, 2022, the standard VAT rate is 10%. | |
| Bangladesh | The standard VAT rate is 15%. | 10%, 7.5%, 5%, 2,4%, 2% |
| Brunei | There is no VAT in Brunei. | |
| China | The standard VAT rate is 13%, 9%, 6% | Reduced rates of 5%, 2%, 3%, 1.5% and 0.5%. |
| UAE | VAT is charged at 5% in the United Arab Emirates (UAE) | |
| Georgia | The standard VAT rate is 18% | |
| Hong Kong | There is no VAT or sales tax in Hong Kong. | |
| India | The primary rates of Indian GST are 0.25%, 1.5%, 3%, 5%, 12%, 18% and 28% | |
| Indonesia | The standard VAT rate is 11% | |
| Iraq | There is no VAT in Iraq. (The standard sales tax ranges from 10% to 300% on alcohol & tobacco) | |
| Israel | The standard VAT rate is 17% | |
| Japan | The standard (Consumption Tax) rate is 10% | 8% |
| Kazakhstan | The standard rate of VAT is 12% | |
| South Korea | The standard VAT rate is 10% | |
| Kuwait | There is no VAT in Kuwait | |
| Laos | The standard VAT rate is 10% | |
| Lebanon | The standard VAT rate is 11% | |
| Malaysia | On September 1, 2018, the Government of Malaysia replaced the Goods and Services Tax (GST) with a 10% Sales Tax (The standard rate of service tax is 8%) | 5% (Sales Tax), 6% |
| Oman | the standard VAT rate in Oman is 5% | |
| Pakistan | Pakistan does not have VAT. The standard sales tax rate is 18% | Pakistan has a large number of reduced sales tax rates, including 1%, 2%, 5%, 10% and 12% (among others). |
| Philippines | The standard VAT rate is 12% | |
| Qatar | There is no VAT in Qatar | |
| Russia | The standard VAT rate is 20% | 10% |
| Saudi Arabia | VAT is charged at 15% | |
| Singapore | The standard Goods and Services Tax (GST) rate is 9% | |
| Sri Lanka | The standard VAT rate is 18% | |
| Taiwan | The standard VAT rate is 5% | |
| Tajikistan | The standard VAT rate is 14% | 10%, 7%, 5% |
| Thailand | The standard VAT rate is 7% (Reduced from the standard 10% until 30 September 2024) | |
| Turkey | The standard VAT rate is 20% | 10%, 1% |
| Uzbekistan | The standard VAT rate is 12% | |
| Vietnam | The standard VAT rate is 8% | Reduced VAT rate is 5% |