Know the latest 18% GST on advertisements across digital, print, TV, & outdoor media. Learn about SAC codes, ITC claims & GST compliance for ads.
GST on Advertisement refers to the Goods and Services Tax applicable to advertising services across platforms like TV, print, digital media, and outdoor promotions. Attracting an 18% GST, this tax impacts businesses leveraging advertisements for visibility. With India’s advertising market valued at over ₹90,000 crores, understanding GST compliance is crucial for avoiding penalties and optimizing marketing budgets.
What is the GST on Advertisements?
The GST on Advertisements in India is 18%. This applies to advertising services across platforms like digital media, print media, TV, and outdoor promotions. For digital media, GST is charged on the full advertising cost. For print media, GST is levied only on agency commission, not on the space sale. Compliance with this tax ensures smooth business operations in the growing advertising sector.
SAC Codes for Advertising services
Service Accounting Codes (SAC) categorize various advertising services under GST. These codes help businesses classify services for GST filing and compliance. Below is a table of SAC codes for different types of advertising services along with applicable GST rates.
| Type of Advertising Service | SAC Code | Description | GST Rate |
| Television and Radio Advertising | 998361 | Advertising in TV and radio media | 18% |
| Digital/Online Advertising | 998365 | Advertising through digital platforms like Google Ads, social media campaigns | 18% |
| Print Media Advertising | 998362 | Advertising in newspapers, magazines, etc. | 5% (sale of space), 18% (agency commission) |
| Outdoor Advertising | 998366 | Advertising on hoardings, billboards, etc. | 18% |
| Cinema Advertising | 998363 | Advertising in cinemas and movie theatres | 18% |
These SAC codes ensure proper tax classification and help avoid errors in GST compliance.
Advertising Sector Taxation Before GST Implementation
Before the implementation of GST, the taxation of advertising services in India was complex and varied across states. Multiple indirect taxes were levied, creating challenges for businesses. Below is an overview of the taxation system pre-GST and a comparison with the post-GST regime:
Taxes Applicable Before GST
- Service Tax: Advertising services were subject to a 15% service tax, including Swachh Bharat Cess (0.5%) and Krishi Kalyan Cess (0.5%).
- VAT (Value Added Tax): Applied on the sale of advertising materials like banners, hoardings, and pamphlets, with rates varying between 5%-15% depending on the state.
- Entry Taxes and Octroi: Levied by certain states on advertising materials transported across borders.
Issues Faced by Businesses
- Double Taxation: Businesses had to pay service tax on services and VAT on materials, leading to inflated costs.
- State-Wise Variability: Different VAT rates across states made compliance cumbersome, especially for large advertising campaigns spanning multiple states.
- Compliance Burden: Maintaining records and filing returns for multiple taxes increased administrative workload and compliance costs.
GST: A Uniform Taxation Structure
The introduction of GST resolved these issues by replacing multiple indirect taxes with a single, uniform tax structure. Key benefits include:
- Unified Tax Rate: Advertising services are taxed uniformly at 18% under GST, eliminating double taxation.
- Simplified Compliance: Businesses now file a single return for GST instead of separate returns for service tax, VAT, and other levies.
- Input Tax Credit (ITC): GST allows businesses to claim input tax credit on inputs used in advertising, reducing the overall tax burden.
Comparative Table
| Aspect | Pre-GST Regime | Post-GST Regime |
| Tax Structure | Multiple taxes (Service Tax, VAT, etc.) | Single GST (18%) |
| Double Taxation | Yes (Service Tax + VAT) | Eliminated |
| Compliance Burden | High (state-wise variations) | Simplified |
| Input Tax Credit (ITC) | Limited ITC on VAT and Service Tax | Full ITC available under GST |
| Uniformity Across States | No | Yes |
The transition to GST has significantly streamlined taxation in the advertising sector, promoting efficiency and transparency in business operations.
FAQs About GST on Advertisement
Is advertising GST free?
No, advertising is not GST-free. It is subject to an 18% GST under the Goods and Services Tax regime, applicable to advertising services across platforms like print, digital, TV, and outdoor media.
Can we claim GST on advertisements?
Yes, businesses can claim Input Tax Credit (ITC) on GST paid for advertising services, provided the advertisements are used for business purposes and the business is registered under GST. Proper invoices and compliance with GST rules are mandatory to claim ITC.
