No change for advertising as GST 2.0 kicks in

Ad rates stay at 18% for digital and 5% for print, even as goods sector undergoes major slab overhaul

by e4m Staff
Published: Sep 4, 2025 8:28 AM | 2 min read

Even as the government ushers in a simplified GST 2.0 regime effective September 22, 2025, advertisers can breathe easy, tax rates on advertising remain untouched. Despite sweeping changes that collapse multiple GST slabs into a streamlined structure, advertising continues under the existing regime.

Digital advertising, covering online, mobile, and social platforms will continue to attract 18% GST, while print media advertising in newspapers and magazines remains at 5%. This ensures that media planners, agencies, and brands face no disruption in ad budgeting or billing practices, even as other sectors adjust to the new GST 2.0 regime.

The broader GST reforms, announced by Finance Minister Nirmala Sitharaman, rationalise the structure for goods — merging four slabs (5%, 12%, 18%, 28%) into just two (5% and 18%), with an additional 40% bracket for luxury and sin goods. However, services like advertising have been left untouched in the transition.

For an industry closely watching costs in a tight ad-spend environment, this stability provides clarity. While there had been expectations in some quarters for a rate cut to ease liquidity and improve cash flows, the consensus view is that the real benefit lies in the uniformity and simplicity of GST 2.0, which reduces compliance burdens and strengthens predictability in financial planning. Businesses can now plan campaigns without factoring in fresh tax volatility, confident that advertising remains insulated from the immediate churn of the overhaul.

On the other hand, the major shake-up under GST 2.0 lies in the goods category, where slabs have been collapsed into a simpler two-tier structure. Essentials like milk, paneer, rice and medicines now fall under the 5% bracket, while items such as home appliances, packaged foods, footwear and consumer electronics are largely taxed at 18%. A steep 40% slab has been reserved for luxury cars, tobacco, and aerated drinks, signalling the government’s intent to both simplify compliance and target high-end consumption.