By CA Surekha Ahuja
Do you need an Indian address? Can a foreigner be the authorised signatory? Is an Indian bank account compulsory?
If you are a foreign company supplying digital services into India, these questions usually arise after establishing that the service is taxable. The answers, however, are rarely a simple yes or no.
The core principle is simple. GST registration does not turn a foreign business into an Indian business. It does not require a foreign supplier to create an artificial Indian address, bank account or identity. What matters is compliance with the specific statutory and procedural requirements applicable to that supplier.
The real difficulty is knowing which requirements are mandatory and which are merely assumed.
First, confirm that the service is actually OIDAR
OIDAR means Online Information and Database Access or Retrieval services.
Broadly, the service must be delivered through the internet or an electronic network, be essentially automated with minimal human intervention and be impossible to provide without information technology.
| Category | Examples |
|---|---|
| Likely OIDAR | Automated digital content, SaaS and cloud software access, online databases, digital products, online advertising, online gaming and typically pre-recorded courses |
| Needs closer analysis | Live-taught services, human-intervention-heavy services and hybrid offerings involving substantial personal delivery |
Start here, not with the paperwork. Ask what is supplied, to whom and how it is delivered. Document the classification before beginning registration.
The supplier can stay outside India — the law already assumes this
Section 24 of the CGST Act provides for compulsory registration of a person supplying OIDAR services from outside India to an unregistered person in India.
Section 14 of the IGST Act specifically deals with OIDAR services supplied from non-taxable territory to a non-taxable online recipient.
Thus, the supplier can be outside India, the customer in India and the supplier have no Indian establishment, while GST liability can still arise.
That is the system working as designed — not a gap requiring creation of a fictitious Indian presence.
Does a foreign supplier need an Indian authorised signatory?
This is frequently misunderstood because the rules for a Non-Resident Taxable Person are often incorrectly applied to foreign OIDAR suppliers.
The two routes are distinct.
| Registration route | Relevant provision | Key position |
|---|---|---|
| Non-Resident Taxable Person | Rule 6, CGST Rules | Authorised signatory must be resident in India and hold valid PAN |
| Foreign OIDAR supplier | Rule 6A, CGST Rules | Specific registration mechanism through FORM GST REG-09A for OIDAR supplied from outside India to a non-taxable online recipient |
The Indian resident PAN-based signatory requirement under Rule 6 should not automatically be imported into Rule 6A.
| Item | Correct position |
|---|---|
| Foreign supplier | Remains the actual supplier |
| Foreign directors or officers | Can remain outside India |
| Indian authorised signatory | Required if the applicable registration or authentication process requires one |
| Indian PAN | Required where the authentication mechanism specifically requires it |
| Foreign tax ID | Cannot substitute for PAN where PAN is specifically required |
| Dummy or unrelated PAN | Never acceptable |
| Indian representative, if appointed | Should be formally authorised with defined scope |
Bottom line: do not create an artificial Indian presence merely to overcome a portal difficulty. If an Indian person is genuinely required, appoint them formally and document the authority.
Can the foreign business address continue to be used?
Yes, where it is the genuine business address.
Section 14 contemplates a supplier located in non-taxable territory and, in relevant circumstances, one having no physical presence or representative in India.
| Address or location | What it should reflect |
|---|---|
| Foreign supplier's principal place of business | Genuine foreign business address |
| Indian authorised signatory, if applicable | Actual Indian address |
| Indian representative, if applicable | Actual Indian address |
| Customer location | Determined under applicable place-of-supply provisions |
| Place of supply | Statutory concept, not automatically the supplier's location |
Do not use an Indian CA's or consultant's office as the foreign supplier's principal place of business merely for convenience.
The address should correspond with actual business and incorporation records.
Is an Indian bank account compulsory?
Not maintaining an Indian bank account does not by itself establish that GST registration is impossible.
Keep three questions separate:
- Is GST registration legally required?
- Does the current portal process require bank details?
- How will the GST actually be paid?
The first is a legal question, the second a procedural question and the third an operational question.
Never represent another person's Indian bank account as the foreign supplier's own account.
Can someone else pay the GST?
Yes, where the applicable statutory mechanism permits it.
Section 14 of the IGST Act contemplates appointment of a person in India to pay integrated tax on behalf of a supplier having no physical presence or representative in India, subject to the applicable conditions.
The critical distinction is:
Paying GST from another person's account does not make that person the supplier.
The records should establish:
- Foreign supplier's GSTIN
- Tax period, tax head and amount
- Identity and authority of the payer
- Challan and payment confirmation
- Credit to the foreign supplier's electronic cash ledger
- Corresponding accounting entry
- Reimbursement or settlement trail, where applicable
Example: Foreign Company A supplies OIDAR services into India. An authorised person in India pays GST from an Indian bank account, but the challan is generated against Company A's GSTIN and the payment is documented as being made on its behalf.
That is fundamentally different from an unrelated Indian company paying without authority and treating the transaction as its own.
Not every Indian customer is automatically a B2C OIDAR customer
Section 24 specifically addresses OIDAR supplies from outside India to unregistered persons in India.
Therefore, an Indian customer should not automatically be classified as B2C OIDAR merely because no GSTIN has been provided.
An unregistered person may still use the service for business or professional purposes. The facts and the statutory definition of non-taxable online recipient therefore require examination.
| Customer | Broad GST analysis |
|---|---|
| Registered Indian business | Import of services, place of supply and applicable reverse charge provisions require analysis |
| Unregistered person using the service for business or professional purposes | Separate analysis required; not automatically B2C OIDAR |
| Genuine non-taxable online recipient | OIDAR-specific provisions apply |
Do not determine GST treatment merely from whether the customer has a GSTIN.
How do you establish that the customer is in India?
Do not rely on the payment source alone.
Relevant indicators include:
- Address supplied through the internet
- Payment card or bank account details
- Billing address
- IP address
- SIM country code
- Fixed landline used to access the service
Build a documented recipient-location policy and retain transaction-level evidence.
An Indian customer may use a foreign payment instrument, and a person outside India may use an Indian payment instrument.
Wrong question: Where did the money come from?
Right question: What evidence establishes the recipient's location under the statutory tests?
For online services supplied to unregistered recipients, applicable invoice requirements should also be followed, including recording the recipient's State where required.
What if the service is sold through an app store, marketplace or aggregator?
An intermediary does not automatically determine who the supplier is for GST purposes.
Examine who:
- Issues the invoice
- Receives or processes payment
- Controls the customer relationship
- Sets the terms
- Authorises delivery
- Is represented to the customer as the supplier
The contractual and commercial substance matters, not merely the label.
Build the compliance file around evidence
A GST certificate alone is not a complete defence in a future dispute.
Entity documents
- Certificate of incorporation and foreign tax registration or TIN
- Constitutional documents
- Board resolution approving Indian GST compliance, where applicable
- Proof of genuine foreign principal place of business
Indian representative or signatory documents, where applicable
- Appointment letter or power of attorney
- Defined scope of authority
- PAN where required
- Proof of residence and contact details
GST records
- Registration application, acknowledgement, certificate and GSTIN
- Tax invoices and receipts
- GSTR-5A, the monthly OIDAR return, due by the 20th of the succeeding calendar month
- Other applicable filings
- Electronic cash and liability ledgers
- Challans and payment confirmations
- Customer-location evidence
- Contracts and transaction records
Third-party payment records, where applicable
- Written authority
- Payer's bank statement and challan details
- GSTIN against which payment was made
- Reimbursement or settlement trail
- Foreign supplier's accounting entry
The objective is to make the complete chain explainable:
Foreign supplier → GST registration → customer classification → place of supply → tax computation → payment → return → accounting record.
GST registration does not automatically create an income-tax PE
Registration under GST to comply with an indirect tax obligation does not by itself mean that the foreign enterprise has become an Indian tax resident or created a Permanent Establishment in India.
PE analysis is separate and involves domestic law, treaty provisions, actual functions performed in India and, where relevant, whether persons in India habitually negotiate or conclude contracts.
A person performing defined GST compliance or payment functions is factually different from someone operating the foreign enterprise's core business from India.
GST compliance and income-tax PE analysis should therefore not be casually merged.
The decision matrix
| Question | Practical answer |
|---|---|
| Is the supplier foreign? | Does not prevent Indian GST liability |
| Is the service genuinely OIDAR? | Confirm this first |
| Is the customer a registered Indian business? | Analyse separately; not B2C OIDAR |
| Is the customer a non-taxable online recipient? | OIDAR-specific provisions may apply |
| Does the supplier need an Indian office? | Not merely because it supplies OIDAR |
| Can the principal address remain foreign? | Yes, if genuine |
| Is Indian PAN required? | Depends on the registration and authentication mechanism |
| Is an Indian representative required? | Depends on the applicable statutory and procedural requirements |
| Is an Indian bank account an absolute requirement? | Do not assume so |
| Can another person pay GST? | Yes, where permitted and properly documented |
| Does GST registration automatically create a PE? | No. Income-tax PE analysis is separate |
The Final
The biggest mistake a foreign digital business can make is solving a procedural inconvenience by creating a false commercial fact.
That happens when a business:
- Uses a consultant's address as its principal place merely to satisfy a perceived GST requirement
- Inserts someone else's PAN to push a registration through
- Allows a third party to pay GST without documenting authority and the GSTIN-level trail
- Treats every Indian customer as B2C OIDAR without examining the facts
The better sequence is:
Identify the service → Identify the supplier → Identify the recipient and status → Determine the applicable registration route → Build the signatory, payment and documentation structure around the actual facts.
Get the sequence right and the foreign supplier can protect both its GST position and its commercial reality — without manufacturing an Indian presence that does not exist.
