In accordance with the 18 percent Integrated Goods and Services Tax (IGST) requirements, GST authorities have served notices to approximately 70 digital companies, encompassing advertising agencies, edtech platforms, and online gaming firms. This crackdown includes renowned foreign entities like Facebook, Google, Netflix, and Spotify, all aimed at ensuring compliance with the latest GST regulations.

New GST Regulations

The recently introduced GST regulations, effective from October 1, apply to all foreign subscription-based service providers serving Indian consumers. They mandate a streamlined registration process under the GST law, whether performed directly or through Indian representatives, with the objective of ensuring tax compliance. Foreign Online Information Database Access and Retrieval (OIDAR) service providers situated beyond Indian borders are obligated to pay 18 percent IGST on a forward charge basis. In this scenario, the service provider assumes the responsibility of collecting the tax from the recipient and remitting it to the government.

OIDAR administrations incorporate a wide cluster of computerized contributions, including promoting, cloud administrations, digital books, films, music, programming, information and data recovery administrations, information capacity, and web based gaming administrations, all conveyed web-based through web stages.

A senior tax official has affirmed, "Foreign OIDAR service providers, including over-the-top platforms and social media companies, generate significant revenue from Indian subscribers. Online education services, gaming, and advertising, previously outside the purview of OIDAR services, now fall within the revised GST definition."

GST officials suspect that several online gaming and advertising firms, in addition to smaller subscription-based players, may be among the notable defaulters.

The government anticipates increased revenue collection, with an estimated ₹2,000 crore for the current financial year (FY2023-24), a significant rise from the approximately ₹700 crore collected in the previous financial year (FY2022-23). These funds are derived from foreign companies providing diverse digital services in India