11-Mar-2026 Case Study: Resolving Cross-Border GST OIDAR Compliance for a Global Gaming Company

Overview

A prominent foreign online gaming company, without a local physical presence in India, was providing digital gaming services to players(users) in India. The company was providing free online gaming to the players, along with in-app gaming features to the players, who had the option of buying the in-app gaming features. The users further had the option of playing the games directly online on the portal of the company or after downloading the game through play stores.  Such players (users) are normally individuals and are considered under B2C category and such individuals are not registered under GST in India.

The company was served an enquiry notice by the Directorate General of GST Intelligence (DGGI). The matter involved the application of Online Information Database Access and Retrieval (OIDAR) provisions under the IGST Act, 2017, and the recovery of historical tax dues.

Our firm represented the company before the DGGI, quantified the liabilities, and established a compliant registration framework despite significant structural barriers involving local banking and PAN requirements.

The Technical Challenge: Breaking the Procedural Loop

The primary challenge in OIDAR compliance for non-resident entities often lies in the friction between standard GST protocols and the specific requirements for foreign service providers. Wherever such OIDAR services are provided by foreign companies, through play stores, the GST liability for the OIDAR services is generally contracted and paid by the play stores. However, in cases, where online gaming services are directly provided by the foreign company to users in India on the company’s website and wherein the users from India, make in-app purchases, then the foreign company is liable to take GST registration as an OIDAR service provider and discharge GST liability in India.

1. 1. Quantification of OIDAR Liability

The company provided in-app gaming features to the users for consideration, which qualify as OIDAR services. A comprehensive reconciliation of global revenue data of the company was undertaken to isolate transactions involving non-taxable online recipients in India, establishing a transparent liability baseline dating back to 2017. 

2. The Registration and Remittance Bottleneck

Standard GST registration and the subsequent remittance of taxes typically presuppose an Indian Permanent Account Number (PAN) and a local Bank Account. In this instance, the client faced a circular procedural hurdle:

Our Strategic Approach: Leveraging Specialized Provisions

Rather than following standard domestic registration routes, our GST Litigation team conducted a technical analysis of the specialized compliance framework designed for non-resident OIDAR service providers.

I. Strategic Identification of Regulatory Exemptions

Our team identified that the GST framework provides a distinct pathway for OIDAR entities that do not appoint an authorized representative in India. Specifically, we leveraged the provision that a local bank account is not a mandatory prerequisite for registration under this category. This insight was pivotal in decoupling the registration process from the time-consuming PAN and banking applications.

II. Securing Registration and Enabling Foreign Remittance

By navigating the specific technicalities of the OIDAR registration module, we successfully secured the client’s GST registration without an Indian PAN.

To address the challenge of discharging the historical liability, we identified a payment architecture that allowed the company to remit taxes directly from their overseas bank account. This eliminated the need for local banking infrastructure and ensured the immediate settlement of dues required for the closure of the litigation.

III. Representation and Matter Closure

The time limits for issuance for Show Cause Notices under section 74 of the CGST Act were considered and the details were submitted only for the applicable periods for which department had the powers for issuing Show Cause Notices. 

With the registration active and the liabilities paid, we represented the client in a Personal Hearing following the issuance of the Show Cause Notice (SCN). We demonstrated that the client had proactively regularized their status through the appropriate legal channels, leading to a successful resolution and formal closure of the enquiry by the DGGI.

Key Outcomes

(a) Bypassed Structural Barriers: Successfully registered a foreign entity by navigating around the PAN and local bank account requirements, which are often cited as primary hurdles for OIDAR providers.

(b) Direct International Remittance: Facilitated the discharge of high-value tax dues directly from foreign accounts, ensuring zero delay in compliance.

(c) Litigation Resolution: Achieved definitive closure of the DGGI enquiry, mitigating the risk of further penalties and interest.

(b) Future-Proofing: Established an ongoing compliance framework for current-period returns and dues, allowing for uninterrupted service delivery to the Indian market.

Expert Insight for Global Entities

For foreign digital service providers to users in India, the complexity of Indian GST often lies in the "exceptions" rather than the "rules." This case underscores the importance of a nuanced understanding of OIDAR-specific procedures, which offer flexible compliance pathways that are often overlooked in standard tax advisory.