The applicant is an intermediary located in non-taxable territory (USA) and provides services of online exams/tests via electronic software to the nontaxable online recipients in India. It has classified these tests into three categories- Type-1, Type-2 and Type-3. Type-3 tests contain mixture of multiple-choice questions and analytical writing assessment section i.e. essay-based questions. The final score of multiple-choice questions is computerised whereas the essay-based questions are sent to human-evaluator in USA for final score. It has sought an advance ruling on whether the services provided for Type-3 test classifies as 'Online Information and Database Access or Retrieval (OIDAR) Services' under GST?
The Authority for Advance Ruling observed that OIDAR services under the GST Act, means the services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology. Out of the three tests offered by the applicant, type-3 tests contain a mixture of multiple-choice questions and analytical writing assessment section i.e., essay-based questions. After completion of test, the essay-based questions are sent to a human-evaluator in USA for assessment and final scoring. Since the final score in Type-3 tests are provided only after human intervention; it should be outside the purview of OIDAR services.
The Authority for Advance Ruling held that the services provided for Type-3 test classifies are not covered under OIDAR services.