GST on Advertising & Marketing Services in India

Advertising and marketing sit at the intersection of creative work, media buying and technology, which is exactly why their Goods and Services Tax treatment often confuses agencies, publishers and brand owners. The rate you charge depends on what you are actually supplying: creative and agency services, digital advertising, or the plain selling of space in a newspaper. This article explains how GST applies across print, digital, media and agency arrangements in 2026, including the special 5% treatment for print media, input tax credit, place of supply and reverse charge.

How GST classifies advertising and marketing services

Advertising services fall under Heading 9983 of the GST services classification, with specific SAC codes for different activities. Getting the classification right matters because it determines whether the standard 18% rate or the concessional 5% rate applies.

• 998361 — Advertising services (creative, campaign design, strategy)
• 998362 — Purchase or sale of advertising space or time on commission
• 998363 — Sale of advertising space in print media (other than on commission)
• 998364 — Sale of television and radio advertising time
• 998365 — Sale of internet advertising space
• 998366 — Sale of other advertising space or time

Standard rate: 18% on agency, creative and digital advertising

The general rate for advertising and marketing services is 18% GST. This covers the bulk of what a modern agency or marketing firm delivers, including the following.

• Creative development, copywriting, design, branding and campaign strategy
• Digital and online advertising — search, social media, display, email and SMS campaigns
• Media planning and buying services
• Sale of advertising time on television and radio
• Outdoor advertising, hoardings, sponsorships and event promotion
• Public relations, influencer marketing and content marketing services

In short, wherever a service element is present — creativity, technology, placement or management — the supply is taxed at 18%. Digital advertising in particular is unambiguously at 18%, regardless of whether the platform is domestic or foreign.

Bundled print campaigns are taxed at 18%

A common error is to assume that anything connected with a newspaper attracts the lower rate. If an agency delivers a print campaign that includes design, content creation or layout along with the space, it is a bundled supply of advertising services and attracts 18% GST. The 5% rate is narrow and applies only to the plain selling of space, as explained below.

The special 5% treatment for selling space in print media

Selling of space for advertisement in print media — that is, newspapers and periodicals — is taxed at the concessional rate of 5% GST when it is a standalone supply of space without creative or agency services. This is the key distinction that sets print apart from every other medium.

• Print media (newspapers, journals, periodicals): 5% when only space is sold
• All other media (digital, TV, radio, hoardings, internet): 18%

The rationale is that print media space, sold as such, is treated more concessionally than services that carry a substantial value-added or creative component. The moment the supply combines space with design, content or campaign management, the concession is lost and the whole supply moves to 18%.

Agency commission: principal versus agent

How an advertising agency is taxed depends on the capacity in which it acts, and this is where many disputes arise.

Acting as principal

When an agency buys media space or time in its own name and resells it to the client at a marked-up price, it is acting as a principal. It pays GST at the applicable rate on the purchase (5% for print space, 18% for other media) and charges GST at the applicable rate on the onward supply to the client. The agency claims input tax credit on the inward supply.

Acting as agent

When the agency merely facilitates the transaction and earns a commission from the media owner or the client, the commission is a separate service. That commission is taxed at 18% GST, irrespective of whether the underlying advertisement runs in print (5%) or digital media (18%). This means an agency handling a newspaper campaign on a commission model still charges 18% on its own commission, even though the print space itself is at 5%.

Input tax credit on advertising and marketing spend

Advertising and marketing are generally treated as expenses incurred in the course or furtherance of business, so the GST paid is available as input tax credit for registered businesses.

• A brand or advertiser can claim ITC on GST charged by its agency or the media owner, provided the tax invoice carries the recipient’s GSTIN and the supplier has reported the invoice.
• An agency can claim ITC on inward supplies used to deliver its services — media space bought as principal, production costs, software subscriptions and vendor services.
• ITC on the 5% print media space is available, but a supplier charging only 5% should manage its own credit position carefully, as inputs are typically taxed at 18%.

Correct credit flow depends on accurate invoicing and timely reconciliation through GST return filing, so both agencies and advertisers should keep documentation and vendor compliance in order.

Place of supply and inter-state considerations

Whether CGST and SGST or IGST applies depends on the place of supply. For advertising services provided to a registered recipient, the place of supply is generally the recipient’s location. Where the recipient is unregistered, the place of supply is the location recorded in the supplier’s records, or the supplier’s location if no address is available.

For advertising in physical media that runs across multiple states — for example, a hoarding or newspaper circulating in several states — the place of supply may need to be apportioned between the states concerned, based on the extent of the advertisement in each. This is particularly relevant for national campaigns and government advertising.

Export of advertising services and reverse charge

Advertising services supplied to a client located outside India can qualify as an export of services, which is zero-rated, provided the conditions are met — the recipient is outside India, payment is received in convertible foreign exchange, and the supplier and recipient are not merely establishments of the same person. When qualifying, the agency can supply under a Letter of Undertaking without charging IGST, or pay IGST and claim a refund.

A word of caution: an Indian agency should establish that it is supplying advertising services on its own account and is not acting as an intermediary between the foreign client and Indian customers, as intermediary services are treated differently for place of supply and may not qualify as exports. On the inward side, where a business imports advertising services from a foreign supplier — for instance, buying ads from an overseas digital platform — GST applies under the reverse charge mechanism, and the Indian recipient must self-invoice and pay 18% GST, which is then available as ITC subject to conditions.

Frequently asked questions

Is the GST rate on advertising 5% or 18%?

The standard rate is 18% for advertising agency services, creative work, digital advertising and most media. The concessional 5% rate applies only to the standalone selling of space for advertisement in print media, such as newspapers, without any creative or agency component.

What GST rate applies to a Google or Meta advertising bill?

Digital advertising is taxed at 18%. If the platform is registered in India, it charges 18% on the invoice. If the service is imported from a foreign supplier without an Indian registration, the Indian business must pay 18% under reverse charge and can then claim it as input tax credit.

My agency runs a newspaper campaign on commission. What do I charge?

The print space itself may be at 5%, but your commission for facilitating the campaign is a service taxed at 18%. When you act as principal and resell the space, you charge the rate applicable to the space you supply.

Can a business claim input tax credit on advertising expenses?

Yes. Advertising and marketing are business expenses, so GST charged by the agency or media owner is available as ITC, provided the invoice carries your GSTIN and the supplier has reported it. There is no blanket block on advertising credit.

Is advertising to a foreign client taxable?

It can qualify as a zero-rated export of services if the conditions are satisfied, including receipt of payment in foreign exchange and the supplier not acting as an intermediary. In that case, no GST is charged when supplied under a Letter of Undertaking.

Advertising businesses juggle multiple rates, commission structures, cross-border billing and reverse charge in a single billing cycle, which makes accurate classification and reconciliation essential. TAXAJ works with agencies, publishers and media businesses to set up correct invoicing, manage ITC and place of supply, and keep filings compliant — so you can focus on campaigns while we handle the GST. Reach out to our team for a review of your advertising GST position.