OIDAR B2C vs B2B: Who Pays GST on Digital Services Sold to India?
What changed — 1 amendment
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Initial publication.
Foreign digital sellers: B2C to unregistered Indian customers = you charge 18% IGST (forward charge); B2B to GST-registered buyers = reverse charge.
When a foreign business sells digital (OIDAR) services to India, who pays the GST depends entirely on whether the customer is registered for GST. Sell to an unregistered customer (B2C) and you charge and remit 18% IGST (forward charge). Sell to a GST-registered business (B2B) that gives you a valid GSTIN and they account for the tax under reverse charge — you charge nothing.
The single deciding factor: a valid GSTIN
- No GSTIN → B2C → “non-taxable online recipient” (NTOR). You must register for Indian GST and charge 18% IGST on the sale, then remit it via your monthly GSTR-5A. There is no threshold — this applies from the first such sale.
- Valid GSTIN → B2B → reverse charge. The Indian registered buyer self-assesses and pays the IGST. You do not charge it and you have no registration duty for those sales.
Decision table
| B2C — unregistered customer (NTOR) | B2B — GST-registered business | |
|---|---|---|
| Charges the 18% IGST | You (the foreign supplier) | Nobody on your side |
| Pays it to the government | You, via GSTR-5A | The Indian buyer, under reverse charge |
| Must you register for GST? | Yes | No |
| On the invoice | Add 18% IGST | ”Subject to reverse charge” |
Don’t call B2C “reverse charge”
A common and costly error: assuming the consumer handles the tax under reverse charge. That is the stale pre-October-2023 framing. Today, B2C/NTOR is a forward charge collected by you; reverse charge applies only to B2B. (See the NTOR trap.)
Make it automatic
Capture a GSTIN field at checkout and validate it against the public GST portal. If valid → treat as B2B and drop the IGST. If blank/invalid → treat as B2C and add 18% IGST. Wiring this into billing means you never have to classify customers by hand — and you don’t under-collect.
For the full picture — registration (REG-10), monthly filing (GSTR-5A), and the income-tax angle — see the OIDAR guide for foreign businesses.
General information as of June 2026, not tax advice. BatchWise handles OIDAR registration + filing for foreign sellers.
Frequently asked questions
Do I charge 18% GST to my Indian customers?
It depends who they are. If the customer is unregistered (no GSTIN) — a B2C / non-taxable online recipient — yes: you charge 18% IGST and remit it (forward charge). If the customer is a GST-registered Indian business and gives you a valid GSTIN, you do not charge IGST; they self-account for it under reverse charge.
How do I know if a customer is B2B?
Ask for a GSTIN at checkout and validate it. A valid 15-digit GSTIN means B2B (reverse charge — don't charge IGST). No GSTIN means the customer is a non-taxable online recipient (B2C — charge 18% IGST). Build this check into your billing flow so the treatment is automatic.
What if I get the B2C/B2B classification wrong?
If you treat a B2C customer as B2B and don't charge IGST, you remain liable as the supplier for the uncollected 18% plus interest and possible penalty. If you wrongly charge a registered B2B buyer, you create reconciliation problems for them. Capturing and validating GSTINs at the point of sale is the clean way to get it right.