Advertisement services are broadly classified under the “supply of services” category. The nature of the advertisement—whether it is published in print media, broadcast on television, aired on radio, or posted on digital platforms—determines the applicable GST rate and classification under HSN codes.
Under GST, advertisement services are generally categorized as:
- Sale of advertising space or time
- Agency services related to creating, placing, or executing advertisements
- Advertising via various media for example- (print, digital, electronic, etc.)
Taxability of Advertising Sector pre GST
With the introduction of Service Tax on all services (other than those covered under negative list) w.e.f July 1, 2012, service tax was applicable on all the aspects of advertising services except the sale of space or time for advertisement in some instances. Accordingly, the sale of time slots in between programs which are being telecasted on television, the sale of space on hoardings, and such were not liable to tax. However w.e.f October 1, 2014, the negative list was amended to restrict the non-taxability to the sale of space in print media and all the other sale of space/time arrangements were brought under the net of service tax.
Advertising Sector under GST and rate of taxes
1. Advertisements in Print Media- Print media includes newspapers, journals, magazines, and other forms of printed publications.
Sale of Advertising Space in Print Media:
- GST Rate: 5%
- This rate is applicable only to advertisements that are published directly in print media. The concessional rate is extended to ensure the growth and affordability of traditional media.
Advertisement Agency Services for Print Media:
- GST Rate: 18%
- If an agency is involved in creating the advertisement or providing other ancillary services, the entire service attracts an 18% GST.
Note: If an agency purchases advertising space and sells it as a bundled service including creative input, GST at 18% is applicable on the total value.
2. Advertisements on Digital Platforms- Digital advertising includes online platforms such as websites, apps, social media, and search engines.
Online Advertisement Services:
- GST Rate: 18%
- This covers services such as ad placement on websites, social media promotions, paid search engine ads, influencer promotions, and video ads.
Advertising through Digital Intermediaries (e.g., Google Ads, Facebook):
The digital intermediary also charges GST on the services provided, and it is passed on to the advertiser. If the platform is located outside India and caters to Indian customers, the provisions of import of services and the reverse charge mechanism (RCM) may apply.
3. Broadcast and Telecast Media Advertisements
Television, radio, and cinema advertising services fall into this category.
- GST Rate: 18%
- This includes all forms of advertising aired through audiovisual platforms.
- Sale of Time Slot on Television/Radio:
- GST is applicable at 18%, whether the slot is sold directly by the broadcaster or via an advertising agency.
4. Outdoor and Transit Advertisements
These include hoardings, billboards, transit media (bus, metro, taxi ads), kiosks, and posters in public spaces.
- GST Rate: 18%
- Applies to both the sale and leasing of advertising space and the agency services provided.
Reverse Charge Mechanism (RCM) in Digital Advertising
When a business avails advertisement services from a provider located outside India (such as Google, Meta, LinkedIn, etc.), it is treated as an import of services. In such cases:
- The Indian recipient of service is liable to pay GST under the Reverse Charge Mechanism.
- The applicable rate is 18%.
- The Indian recipient can claim Input Tax Credit (ITC) on such GST paid under RCM, provided the service is used for business purposes.
For example, if a company in India runs a campaign through Google Ads (billed by Google Singapore), the Indian company is required to:
- Self-invoice the transaction
- Pay 18% GST on the billed amount
- Report it under RCM in GSTR-3B and GSTR-1
- Claim ITC, subject to eligibility
SAC codes of Advertising services
| Group 99836 | Advertising services and provision of advertising space or time |
| 998361 | Advertising Services |
| 998362 | Purchase or sale of advertising space or time, on commission |
| 998363 | Sale of advertising space in print media (except on commission) |
| 998364 | Sale of TV and radio advertising time |
| 998365 | Sale of Internet advertising space |
| 998366 | Sale of other advertising space or time (except on commission) |
FAQs
Q1. How will the GST be implemented on advertising outside of India?
The advertising services provided by the registered person outside of India to Indian individuals are subject to GST via the reverse charge mechanism. The recipient in India is responsible for paying the GST to the government.
Q2. Is newspaper advertising exempted from GST?
Newspaper advertising is generally not exempted from GST. It is subject to GST at the standard rate, which is currently at 18%. However, the accurate rate may vary depending on the type of newspaper and the nature of the advertisement.
Q3. How much GST is generally charged on advertisements and advertising services?
The GST on advertisements is generally charged at 18%. However, the rates may change to 5% depending on factors such as the medium used for advertising and the type of service.
Q4. Advertisement through registered person outside India?
As per Section 5(3) of the IGST Act, 2017 reverse charge mechanism is applicable on notified goods and services. This also applies to any supply of service by any person who is located in a non-taxable territory to any person located in a taxable territory, other than the non-taxable online recipient. If Mr A procures advertisement service from M/s. HIJ, a person located in non-taxable territory, then Mr A would be required to discharge the GST liability to the Government as a recipient of service.
Q5. Input Tax GST credit on Advertising services?
Businesses can claim ITC on GST paid on advertisement services if:
- The service is used for business promotion or operations
- The input service is not blocked under Section 17(5) of the CGST Act
- A proper tax invoice is available with the HSN code and GSTIN
For example, if a retail company advertising through the medium of television or digital media can avail of ITC on the GST paid on these services, it can reduce its overall tax liability.
