GST 2.0 keeps digital ads at 18% and print at 5%

As the government rolls out the simplified GST 2.0 regime from September 22, 2025, tax rates on advertising remain unchanged.

Digital advertising across online, mobile, and social platforms will continue to attract 18% GST, while print advertising in newspapers and magazines stays at 5%. This ensures no disruption in budgeting or billing practices for advertisers, agencies, and media planners, even as other industries adjust to the overhaul.

With GST rates on advertising unchanged under the new GST 2.0 regime, brands and agencies can plan campaigns without adjustments to tax outgo.

Under GST 2.0, the sharpest changes apply to consumer goods. Essentials like milk, paneer, rice, and medicines now fall under the 5% bracket, while home appliances, packaged foods, footwear, and consumer electronics are largely taxed at 18%, reduced from 28%.

Lower taxes on televisions and smart devices could accelerate digital adoption, potentially expanding the audience base for advertisers. Similarly, reduced levies on consumer goods may encourage higher ad spending.

The broader reforms, announced by Finance Minister Nirmala Sitharaman, merge four existing GST slabs of 5%, 12%, 18% and 28% into two, 5% and 18%, with an additional 40% bracket for luxury and sin goods. However, services such as advertising have been excluded from the restructuring.

A steep 40% slab has been reserved for bigger cars, tobacco, and aerated drinks, marking the government’s effort to simplify compliance while targeting high-end consumption. The GST rate on all electric vehicles will remain unchanged at 5 per cent.

Meanwhile, GST was raised to 18% from 12% on apparel and clothing accessories that cost more than 2,500 rupees, which could hurt global brands such as Marks and Spencer, Levi Strauss, and Zara.

FM Sitharaman noted that these reforms have been carried out with a focus on the common man. “Every tax levied on the common man’s daily use items has gone through a rigorous look into. And, in most cases, the rates have come down drastically. Labour-intensive industries have been given good support. Farmers and agriculture as a whole will also benefit by the decisions we have taken today; health-related related also will benefit. So, the key drivers of the economy have been given prominence,” she said.

Referring to the imposition of tariffs on India by the US, Sitharaman said, “The tariff turmoil is not a matter that influenced the GST reform, because we have been at it now for more than one-and-a-half years. Some Group of Ministers was working on rate rationalisation, some other Group of Ministers, a bit later, was working on insurance, and so on. And compensation cess was a reality, that it is going to end the moment you pay back the loans. None of this has anything to do with the tariffs.”