Whether commission retained by an overseas freelance marketplace is consideration for OIDAR service or intermediary service under the IGST Act?

[Mith Moh]

ABC, a company incorporated outside India, operates an online marketplace connecting Indian freelancers with overseas clients similar to platforms like Upwork, Fiverr etc. The platform enables freelancers to create profiles, list their services, communicate with clients, execute contracts, deliver work digitally, receive payments through an escrow/payment mechanism, and obtain invoices through the platform.

ABC does not charge any fee for registration, profile creation, or listing services. Instead, it deducts a commission (e.g., 10% of the contract value) only when a contract between the freelancer and the client is successfully concluded and payment is received. Separate invoices are generated by ABC on the freelancer for the commission retained in addition to main invoice which is between freelancer and client.

1. Can the commission retained by ABC be regarded as consideration for an OIDAR service under the amended definition in Section 2(17) of the IGST Act OR does the fact that ABC also facilitates the underlying supply necessarily result in its classification as an intermediary service, or can OIDAR be regarded as the more appropriate classification for the purpose of determination of place of supply prior to 30.03.2026?

Whether place of supply is determined by Section 13(2)(b) or 13(12) of IGST act prior to 30.03.2026?

AI Summary

Online marketplace commission classification determines whether cross-border digital platform services follow OIDAR or intermediary place-of-supply rules. Online marketplace commission retained by a foreign platform from Indian freelancers raises classification of the platform's service as OIDAR or intermediary service under the IGST Act. The platform enables profiles, listings, communications, contracting, digital delivery, payment processing, and invoicing, while charging commission only upon successful conclusion and payment of a freelancer-client contract. The issue is whether facilitation requires intermediary classification or supports OIDAR classification, and whether place of supply follows the general cross-border rule or the specific OIDAR rule before 30 March 2026.