{"id":8866,"date":"2025-03-27T08:26:45","date_gmt":"2025-03-27T08:26:45","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8866"},"modified":"2025-03-27T08:26:45","modified_gmt":"2025-03-27T08:26:45","slug":"payment-to-chatgpt-for-add-on-features-is-covered-under-gst","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/","title":{"rendered":"Payment to ChatGPT for Add-on Features is covered Under GST"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-4661\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/07\/GSNT-New-GST-Rates-update-effective-from-July-2022.jpg\" alt=\"GSNT New GST Rates update effective from July 2022\" width=\"1005\" height=\"690\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69deb56f36bd7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69deb56f36bd7\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#Payment_to_ChatGPT_for_Add-on_Features_is_covered_Under_GST\" title=\"Payment to ChatGPT for Add-on Features is covered Under GST \">Payment to ChatGPT for Add-on Features is covered Under GST <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#GST_Compliance_Summary_ChatGPT_for_Add-on_features_is_covered_under_GST\" title=\"GST Compliance Summary: ChatGPT for Add-on features is covered under GST: \">GST Compliance Summary: ChatGPT for Add-on features is covered under GST: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#GST_Compliance_Scenarios\" title=\"GST Compliance Scenarios\u00a0\">GST Compliance Scenarios\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#A_If_OpenAI_ChatGPT_is_a_Foreign_Entity_Non-Resident_Service_Provider\" title=\"(A) If OpenAI (ChatGPT) is a Foreign Entity (Non-Resident Service Provider)\">(A) If OpenAI (ChatGPT) is a Foreign Entity (Non-Resident Service Provider)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#B_If_OpenAI_ChatGPT_is_Registered_under_GST_in_India\" title=\"(B) If OpenAI (ChatGPT) is Registered under GST in India\">(B) If OpenAI (ChatGPT) is Registered under GST in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/payment-to-chatgpt-for-add-on-features-is-covered-under-gst\/#Conclusion\" title=\" Conclusion\"> Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Payment_to_ChatGPT_for_Add-on_Features_is_covered_Under_GST\"><\/span><span style=\"color: #000080;\"><strong>Payment to ChatGPT for Add-on Features is covered Under GST <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>GST implications on payments made to OpenAI (ChatGPT) for add-on features is well-structured and aligns with Indian GST laws regarding Online Information and Database Access or Retrieval (OIDAR) Services.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"GST_Compliance_Summary_ChatGPT_for_Add-on_features_is_covered_under_GST\"><\/span><span style=\"color: #000080;\"><strong>GST Compliance Summary: <\/strong><strong>ChatGPT for Add-on features is covered under GST: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #000080;\"><strong>Classification of ChatGPT Services under GST<\/strong><\/span><\/p>\n<ul>\n<li>OIDAR Service: As per Section 2(17) of the IGST Act, 2017, ChatGPT\u2019s digital AI-based services qualify as OIDAR. ChatGPT provides AI-based services digitally over the internet, without significant human intervention. As per Section 2(17) of the IGST Act, 2017, OIDAR services include:\n<ul>\n<li>Cloud-based software services<\/li>\n<li>Online data storage<\/li>\n<li>Artificial intelligence-based services provided digitally<\/li>\n<\/ul>\n<\/li>\n<li>Since ChatGPT operates digitally and delivers services via the internet, it qualifies as an OIDAR service provider<\/li>\n<li>SAC Code: Likely under SAC 9984 (Telecommunication, Broadcasting &amp; IT Services) or SAC 9983 (Other IT &amp; Digital Advertising Services).<\/li>\n<li>GST Rate: 18% IGST.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"GST_Compliance_Scenarios\"><\/span><span style=\"color: #000080;\"><strong>GST Compliance Scenarios<\/strong><strong>\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"A_If_OpenAI_ChatGPT_is_a_Foreign_Entity_Non-Resident_Service_Provider\"><\/span><span style=\"color: #000080;\"><strong>(A) If OpenAI (ChatGPT) is a Foreign Entity (Non-Resident Service Provider)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Nature of Transaction: Import of Services under GST.<\/li>\n<li>GST Treatment: Reverse Charge Mechanism (RCM) applicable.<\/li>\n<li>GST Payment &amp; Filing:\n<ul>\n<li>Pay 18% IGST under RCM (as per Section 5(3) of IGST Act &amp; Notification No. 10\/2017-IT (Rate)).<\/li>\n<li>Report in GSTR-3B (Table 3.1(d)).<\/li>\n<li>Report in GSTR-1 (Table 4 &#8211; Inward Supplies Liable to RCM).<\/li>\n<li>ITC Availability: Eligible if used for business purposes (Claim ITC in GSTR-3B (Table 4(A)(3))).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"B_If_OpenAI_ChatGPT_is_Registered_under_GST_in_India\"><\/span><span style=\"color: #000080;\"><strong>(B) If OpenAI (ChatGPT) is Registered under GST in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Nature of Transaction: Domestic taxable supply.<\/li>\n<li><span style=\"color: #003366;\"><strong>GST Compliance:<\/strong><\/span>\n<ul>\n<li>OpenAI will charge 18% GST on the invoice.<\/li>\n<li>Indian company can claim ITC on GST paid, if used for business.<\/li>\n<li>GST Compliance Steps:\n<ul>\n<li>Verify GST invoice with GSTIN.<\/li>\n<li>Pay the invoice amount including 18% GST.<\/li>\n<li>Claim ITC in GSTR-3B (Table 4(A)(5)).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong><span style=\"color: #000080;\"> Documentation &amp; Record-Keeping:<\/span> <\/strong>GST taxpayers are required to maintain invoice &amp; payment records. Also Issue self-invoice under Rule 46 of CGST Rules in case of RCM payment. And they ensure correct classification under SAC codes and proper GST filing.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><span style=\"color: #000080;\"><strong> Conclusion<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>If OpenAI (ChatGPT) does not have a GST registration in India, then RCM is applicable (18% IGST).<\/li>\n<li>In case OpenAI has a GST registration in India, it will charge 18% GST directly, and ITC can be claimed.<\/li>\n<li>Proper GSTR-3B and GSTR-1 compliance is required for correct reporting and ITC claims.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Payment to ChatGPT for Add-on Features is covered Under GST GST implications on payments made to OpenAI (ChatGPT) for add-on features is well-structured and aligns with Indian GST laws regarding Online Information and Database Access or Retrieval (OIDAR) Services. GST Compliance Summary: ChatGPT for Add-on features is covered under GST: Classification of ChatGPT Services under &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[933],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8866"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8866"}],"version-history":[{"count":2,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8866\/revisions"}],"predecessor-version":[{"id":8868,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8866\/revisions\/8868"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}