.jpg)
The government’s proposal to simplify GST slabs has sparked mixed reactions within India’s advertising industry that is expected to touch Rs. 1.2 lakh crore by the end of this year (as per Pitch Madison Advertising Report 2025). While some see the possibility of lowering the 18% GST on advertising services to 5% as a move that could unlock liquidity, boost campaign spends, and widen participation from smaller brands and startups, others argue the impact may be limited given input tax credits already balance out costs for most large advertisers. Across the board, however, industry voices agree that a uniform and simplified GST regime, whether at 5% or 18%, would reduce compliance complexities, improve cash flows, and bring greater predictability to client investments and agency operations. Advertising services in India currently carry a standard GST rate of 18%, which applies broadly to digital, outdoor, television, and agency-based advertising services. An exception to this is print media, where the sale of advertisement space in newspapers or magazines is taxed at a reduced rate of 5%, although creative or content services included in the same transaction may be taxed at a higher rate. The OOH industry has already been demanding that GST on advertising be reduced to 5%.
Skepticism on GST cut
Despite the speculation, not everyone in the industry is convinced that a cut to 5% is on the cards. Siddharth Devnani, co-founder and COO of SoCheers, believes the likelihood of such a reduction is slim and warns that even if implemented, the change could complicate compliance for advertisers rather than ease it. “Current GST is at 18% across the board for the majority of the service industry including A&M, and is unlikely to change in the upcoming cycle. The change in clients' products going from 18% to 5% GST will still have an impact because they may not be able to fully set off the tax monies they spend with us on any type of advertising services in their monthly GST amount. This will add an additional compliance burden on their finance operations and maybe a significant cost,” he said. According to Devnani, in case the rate goes from 18% to 5%, the only case it will have a positive impact is lower outflow in tax to GST of unregistered businesses (like very small shops or those who are not revenue-focused like government departments and NGOs.) “I'm expecting most regular customers of ours won't bat an eye on change in the percentage slab - if it changes from 18% at all that is. My verdict - it's not happening,” he added.
Optimism on industry liquidity
Offering a contrasting perspective, Rajesh Radhakrishnan, Co-founder & CMO at DOOH and advertising company, Vritti iMedia, described a potential reduction as a ‘game-changer’. “The Indian advertising market is currently valued at around Rs1.2 lakh crore. A reduction of GST from 18% to 5%, which is a 13% difference, would release significant liquidity back into the hands of client advertisers. This would lower operational costs substantially, encourage higher client investments, and lead to a healthy expansion of campaign budgets. We can expect to see stronger demand for advertising across platforms, increased appetite for media property acquisitions, greater investments in technology, and more room for experimentation with new formats and creative ideas. Importantly, such an environment could also inspire new entrepreneurship in the sector, creating opportunities for smaller players and startups to participate in meaningful ways,” he said.
Broader ecosystem impact
Sarabjit Singh Puri, Chairman, Fateh Rural Limited, which focuses on rural advertising and marketing, said the benefits would flow across the ecosystem, not just select categories. "If GST on advertising services were reduced from 18% to 5%, the benefit would flow across the entire advertising ecosystem, not just OOH. Campaigns on television, print, digital, and experiential platforms would all become more affordable, encouraging brands to increase their overall marketing spends. This would be particularly significant for sectors like FMCG, retail, and e-commerce, where margins are tight and scale is critical,” Puri said. In rural advertising, for instance, a seed company that does not fall under GST cannot claim input credit. If it opts for advertising support, its GST burden would reduce from 18% to 5%, making the expense far more manageable.
Creator economy perspective
Atin Sharma, Co-founder of Aer Media, an influencer marketing startup, sees clear gains for the creator economy. “A reduction from 18% to 5% GST on marketing services would act like a win-win for the entire marketing and advertising ecosystem. Brands will save on working capital and budgets, agencies will benefit from stronger demand and better liquidity, and influencers will see higher opportunities. The most significant shift will be seen in industries where the consumer also benefits from a lower GST rate, as it will directly impact demand, result in higher marketing budgets and a very positive impact to the creator economy,” Sharma said. Priya Vivek, Co-founder & Head of Revenue & Partnerships at Qoruz, added that while agency systems won’t be disrupted, brands stand to benefit from eased cash flows. “With reduced tax outflows, marketers may have a little more flexibility in their campaign budgets. This could translate into incremental spends on content, influencer activations, or experimenting with new formats, essentially giving agencies and platforms some extra room to push creativity. For the industry overall, it’s not a structural disruption, but it could encourage brands to invest a bit more confidently,” she said.
Agency adaptation
Prakhar Srivastava, Vice President, Financial Planning and Corporate Strategy at White Rivers Media, stressed that agencies will need to adapt regardless of whether the rate drops or remains steady. According to Srivastava, advertising is treated as a business service rather than an essential, so the focus is on stability and clarity rather than a rate reduction. What matters most is a GST system that is predictable and straightforward, allowing agencies and brands to plan ahead confidently and avoid compliance issues. If the broader reform streamlines slabs across industries and reduces classification disputes, it will indirectly benefit advertising too. He said a drop in the GST rate would have a limited effect on overall costs, since advertising expenses are already eligible for input tax credit. “The true benefit comes from making compliance easier, streamlined filings, faster reconciliations, and consistent tax treatment for related services like production, events and influencer campaigns can help agencies and brands work more efficiently. For smaller firms, reducing paperwork makes a real difference, freeing up time and resources for clients and growth. In the long run, a simpler GST regime helps everyone: brands can plan with certainty, agencies operate more smoothly, and media platforms see more consistent advertising flows,” said Srivastava.
Brand-side view
From a marketer’s standpoint, Nitin Malhotra, CMO at Livpure India, said the move would open doors for wider campaigns and creativity. “Reduction of GST will surely be a welcome move and will accelerate advertising expenditure with more campaign possibilities and more diverse media channels. In addition, it will offer advertisers an option to experiment and invest in more creative concepts and widen the depth and scale of current outreach,” Malhotra said.
Uniformity over rates
Suyash Lahoti, Partner at Wit & Chai Group, highlighted the risks of a uniform hike to 18%. “If GST on advertising were to drop to 5%, it would unlock higher spends from brands, especially small and mid-size businesses who are currently price sensitive. Conversely, if GST rises to 18% across all categories, we risk seeing a slowdown in ad investments, with brands reallocating budgets more cautiously, agencies under pressure to justify ROI, and media platforms facing a tighter revenue flow. Advertising is not just a cost line but a growth driver for businesses, and any increase in tax dampens that multiplier effect. A balanced GST regime that recognises the role of advertising in fuelling consumption and India’s digital economy would be ideal,” he said. Bringing the discussion full circle, Ritesh Bhatt, Associate Vice President at Connect Network, pointed out that the real win for the industry may lie less in the exact percentage and more in uniformity. "For brands, a uniform GST slab would mean more predictable costs. The 5% print advantage disappears, making ads costlier and pushing brands to rethink budgets. At the same time, a single 18% rate ensures cleaner ITC (input Tax Credit) claims across all media, simplifying accounting and encouraging a shift of spends towards TV, digital, OOH, and cinema where returns are stronger,” said Bhatt.
Ultimately, whether GST on advertising settles at 5% or 18%, the industry’s consensus is clear, predictability and uniformity matter more than the number itself offering the clarity needed for brands to invest confidently and agencies to plan with focus.
.jpg)
.jpg)
.jpg)
