The GST Appellate Tribunal (GSTAT), Delhi State Bench, has held that appeals involving Online Information and Database Access or Retrieval (OIDAR) services fall exclusively within the jurisdiction of the Principal Bench of the GSTAT. 

The bench of  Sanjay Kumar Aggarwal (Judicial Member) and Rajiv Kapoor (Technical Member) declined to entertain an appeal concerning an alleged ₹1,36,634 IGST liability under the Reverse Charge Mechanism (RCM) and directed the Registry to transfer the matter to the Principal Bench, GSTAT, New Delhi.

The dispute arose from an allegation that OIDAR services had been received from an overseas supplier and that IGST was consequently payable under RCM.

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The proceedings originated from an Order-in-Original, which confirmed a demand of ₹1,36,634 under Section 74(1) of the CGST Act, 2017 on account of alleged non-payment of IGST under RCM in respect of OIDAR services stated to have been received from Facebook Ireland Ltd.

The first appellate authority subsequently passed an Order-in-Appeal dated October 3, 2025, dropping the demand. The Revenue challenged that decision before the GSTAT, contending that the demand had been dropped without adequate verification of whether the taxpayer had actually received taxable services from the overseas entity.

According to the grounds raised in the appeal, the taxpayer had maintained that it had not availed any services from Facebook Ireland Ltd. during FY 2017-18 and had produced its records and financial statements in support of that position.

The department argued that the appellate authority should have independently examined the taxpayer’s ledger accounts, bank statements and other corroborative records before accepting the explanation. It also relied upon information allegedly received from the Directorate General of GST Intelligence (DGGI), Headquarters, New Delhi, which purportedly indicated that services had been availed from Facebook Ireland Ltd. during the relevant period.

The department’s case was that the appellate authority had relied upon the taxpayer’s submissions without adequately testing their correctness against primary documentary evidence.

It specifically contended that the taxpayer’s claim should have been cross-checked against expense ledgers, inward remittance details, invoices and bank account statements for the relevant financial year.

The appeal therefore raised a substantive dispute over whether taxable OIDAR services had actually been received from a foreign supplier and whether the resulting IGST liability was payable under RCM.

However, rather than examining the merits of the alleged tax liability, the GSTAT Division Bench first considered whether the State Bench itself had jurisdiction to hear the appeal.

During the hearing, both sides submitted that the dispute involved the supply of OIDAR services and that, consequently, the matter fell within the jurisdiction of the Principal Bench of the GSTAT.

The Tribunal examined the statutory framework governing the allocation of cases between the Principal Bench and State Benches under Section 109 of the CGST Act, 2017.

Section 109(5) provides that the Principal Bench and State Benches may hear appeals against orders passed by the Appellate or Revisional Authority, but specifically stipulates that cases involving an issue relating to place of supply are to be heard only by the Principal Bench.

The Tribunal also considered the subsequent notification issued by the Government pursuant to the third proviso to Section 109(5).

The Tribunal referred to Notification No. S.O. 4219(E) dated September 17, 2025, issued in exercise of powers under Section 109(5) of the CGST Act.

The notification specified categories of cases that were required to be heard exclusively by the Principal Bench.

Among these were cases in which one or more issues were covered under Section 14 or Section 14A of the Integrated Goods and Services Tax Act, 2017, as well as cases involving issues covered under Section 20 of the CGST Act.

This notification assumed particular significance because Section 14 of the IGST Act contains special provisions relating to payment of tax by a supplier of OIDAR services.

The Tribunal therefore connected the nature of the services involved in the appeal with the statutory allocation of jurisdiction under Section 109 of the CGST Act.

The GSTAT concluded that the statutory provisions had a direct bearing on the appeal.

It held that, when Section 109(5) of the CGST Act is read together with Section 14 of the IGST Act and Notification No. S.O. 4219(E) dated September 17, 2025, appeals involving OIDAR services fall exclusively within the jurisdiction of the Principal Bench of the GST Appellate Tribunal, New Delhi.

Consequently, the Division Bench held that, being a State Bench, it did not have jurisdiction to entertain the appeal.

The Tribunal thus did not adjudicate the underlying controversy regarding whether the alleged services were actually received, whether they constituted OIDAR services, or whether ₹1,36,634 was payable as IGST under RCM. The jurisdictional issue was sufficient to dispose of the matter before the State Bench.

The Tribunal directed its Registry to transfer the appeal together with the complete record to the Principal Bench, GSTAT, New Delhi.

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