GST on OTT Subscription in India: Complete 2026 Guide

Latest update: Karnataka has started adding a state cess of up to 2% on OTT subscription bills on top of the standard 18% GST, and Haryana already has a similar entertainment duty in place. A recent Supreme Court ruling has reopened the legal question of whether states can levy this alongside central GST, so subscribers billed from these two states may now be paying more than the rest of the country for the exact same plan.

Netflix, Amazon Prime Video, Disney+ Hotstar, SonyLIV, or any other streaming subscription you pay for in India carries 18% GST, charged on top of the plan price. This rate hasn't moved since the GST Council's September 2025 rate rationalisation, even though dozens of other categories saw cuts. If you're a consumer wondering why your ₹649 Netflix plan actually bills at ₹766, or a business trying to classify OTT spend correctly in your books, here's what's actually happening with the tax, the SAC code involved, and a state-level twist that's currently making subscription pricing messier in a couple of states.

The short answer: 18% GST, no exceptions for streaming

OTT platforms fall under India's Online Information Database Access and Retrieval (OIDAR) framework, and OIDAR services are taxed at a flat 18% under GST — split as 9% CGST + 9% SGST for intra-state billing, or 18% IGST where the platform bills across state lines. Where both the OTT platform and the subscriber are located in India, this 18% applies directly, with the platform collecting and remitting the tax. There's no slab-based pricing here the way there is for, say, movie tickets, where a ₹100 ticket and a ₹300 ticket attract different rates. Cinema tickets priced up to ₹100 attract 12% GST while tickets above ₹100 attract 18%, but every OTT plan, whether it's a ₹149 mobile-only tier or a ₹1,499 premium 4K plan, sits at the same 18%.

This covers the full range of what people mean by "OTT" for GST purposes:

• Video streaming (Netflix, Prime Video, Hotstar, SonyLIV, Zee5, JioCinema premium tiers)

• Music and audio streaming (Spotify, Gaana, Wynk)

• E-book and digital library subscriptions, with one narrow exception covered below

• Cloud gaming and app-based content subscriptions delivered over the internet

Why OTT sits under OIDAR, not "entertainment services"

Before GST, entertainment tax was a state subject, collected separately by each state government on cinema and cable TV. Streaming didn't fit that old bucket cleanly, so it got classified instead as an OIDAR service: a digital service delivered over the internet with no physical interface between the platform and the subscriber. Under Section 2(17) of the IGST Act, this covers anything delivered through IT infrastructure that a subscriber accesses purely online, movies, TV shows, music, or software, without a courier, a disc, or a physical store involved.

That classification matters because OIDAR services follow their own place-of-supply and registration rules, separate from goods and separate from ordinary domestic services. It's also why OTT platforms based outside India, which is most of the big ones, have to follow a specific registration route rather than the standard GST registration process any Indian business would use.

SAC code and how it appears on your invoice

OTT and other OIDAR-type digital content supplies fall under SAC group 99843, within HSN heading 9984 (telecommunications, broadcasting, and information supply services). This code classifies services delivered electronically or through digital means such as streaming, downloading, or accessing digital content, and it carries the standard 18% GST rate. A B2B invoice for a business-purchased OTT or SaaS-style subscription typically shows the SAC code alongside the taxable value and the CGST/SGST or IGST breakup, the same format used across other OIDAR-classified digital services.

One exception worth knowing: a supply that is purely an e-book, meaning the electronic version of an already-printed book under Customs tariff item 4901, attracts a concessional 5% rate instead of 18%, under Notification 13/2018-Central Tax (Rate). This exception is narrow. It doesn't extend to audiobooks, video content, or bundled digital libraries that mix formats. If your platform sells a "reading + video" combo subscription, the whole bundle is taxed at 18%, not 5%.

Foreign OTT platforms: who actually pays the tax

This is where most confusion starts, because Netflix and Spotify aren't Indian companies, yet Indian subscribers still see 18% GST added to their bill. Two scenarios cover almost every real case:

1. You're an individual subscriber (B2C). The foreign platform is required to register in India under the simplified OIDAR registration process and collect GST directly from you at checkout, the same way an Indian platform would. India began requiring overseas OIDAR providers to register and collect GST from Indian consumers, including on entertainment and educational platforms, from October 2023. This is why the GST line already shows up on your Netflix or Spotify invoice without you doing anything.

2. You're a GST-registered business subscribing on the company's behalf (B2B). Here, the liability flips. Under the reverse charge mechanism per Section 5(3) of the IGST Act, the Indian business itself calculates and pays the 18% IGST directly to the government, rather than the foreign platform collecting it. This applies regardless of your business's own turnover threshold, so even a small firm using a foreign tool crosses into RCM territory the moment it's a registered GST entity making the purchase. The business can typically claim this RCM payment as input tax credit, subject to the usual ITC conditions.

Practical implication for MSMEs: if your accounting or design team subscribes to a foreign SaaS or content tool using the company's GSTIN, don't assume "the vendor doesn't charge GST" means no GST is owed. It usually means you owe it under RCM, and skipping that step is a compliance gap that shows up at audit time, not at subscription time.

The state cess complication: Karnataka and Haryana

For most of GST's history, the "One Nation, One Tax" pitch held up cleanly for OTT: one 18% rate, centrally administered, no state variation. That's shifting.

In September 2024, Karnataka's Governor approved the Karnataka Cine and Cultural Activists (Welfare) Bill, which introduces a cess of up to 2% on movie tickets and OTT subscription fees, intended to fund welfare support for cinema and cultural workers in the state. Haryana has a comparable structure under the Haryana Municipal Entertainment Duty Act, 2019. Both predate a broader legal question that a recent Supreme Court ruling has reopened: whether states retain the constitutional power to levy entertainment-style taxes on broadcasting and digital content alongside central GST, under what's called the "aspect theory," where the same activity can legitimately attract two separate levies from two separate legislative lists if each is taxing a genuinely different aspect of it.

For subscribers, the practical effect is regional: if you're billed from an address in Karnataka, you could see a small additional state cess layered on top of the 18% GST, something a subscriber in, say, Rajasthan or Maharashtra won't see on an identical plan. Whether this survives ongoing legal challenges, and whether more states follow Karnataka and Haryana's lead, is still unsettled as of mid-2026. If you run a business billing subscribers across states, this is worth tracking separately from your core GST compliance, since it isn't uniform and isn't going through the GST Council process.

Does the GST 2.0 rate rationalisation change anything for OTT?

Not the rate itself. The GST Council's September 2025 reforms collapsed most goods and services into a simplified two-slab structure of 5% and 18%, with a separate 40% band for a short list of luxury and sin categories (online real-money gaming among them, now taxed steeply higher than before). OTT subscriptions stayed exactly where they were: 18%, unchanged. The reform's real relevance to streaming platforms is indirect, lower GST on a wide range of everyday goods can free up household spending, some of which may flow toward discretionary subscriptions, but that's a market effect, not a tax change to the subscription itself.

GST on OTT: quick reference table

 

FAQs

Is GST charged on the full subscription price or after any discount? 

GST applies to the actual transaction value, meaning whatever you're billed after a platform-applied discount or offer price. If Netflix charges you ₹500 instead of the listed ₹649 under a promotional offer, 18% GST is calculated on the ₹500, not the original list price.

Do free, ad-supported OTT tiers attract GST? 

No. Where there's no payment from the subscriber, there's no taxable supply of the OIDAR service to that consumer, so no GST applies to the free tier itself. Ad revenue the platform earns separately is a different taxable supply, an advertising service, and is taxed at 18% on the platform's side.

Can a business claim input tax credit on OTT subscriptions? 

Only if the subscription is genuinely used for business purposes and properly documented, such as a media or content-production company subscribing for research or reference. A personal Netflix account run through a company card generally won't qualify, and claiming it as ITC without a real business use case is a red flag in a GST audit.

Why does my Karnataka friend's Netflix bill look different from mine?

If the newly introduced state cess in Karnataka is being applied to your friend's billing address, that's the difference, an additional state-level charge on top of the standard 18% GST, which isn't applied uniformly across India.

Is the 18% GST rate on OTT likely to change soon?

There's no indication of that from the September 2025 GST Council reforms, which left the rate untouched even while restructuring many other categories. Any future change would come through a formal GST Council notification, not through platform pricing decisions alone.

Does GST apply to OTT platforms owned and operated entirely within India, like a regional-language streaming app? 

Yes. Indian OIDAR service providers follow the standard 18% GST registration and filing process (GSTR-1, GSTR-3B, annual returns) exactly like any other domestic taxable service provider, with no exemption based on the platform being India-based.

About the Author

Omprakash Kumawat is an SEO Intern at Legal Dev and growing interest in search engine optimization, digital marketing, and legal technology. He specializes in creating well-researched, SEO-friendly content on topics related to GST, taxation, business compliance, and company law.