GST on Ads is levied at the following rates
- Digital Media – 18%
- Print Media – 5%
GST on Ads on Mobile, Website, Apps etc
GST on Ads on Mobile, Website, Apps or any other Digital Media platforms is levied @ 18%. The advertiser i.e. the person who is giving the advertisement would be required to pay GST to the publisher i.e. the service provider and the service provider would be required to deposit this GST with the govt.
This can be explained with the help of an example:-
Karan Batra sells an advertisement on his website charteredclub.com to Reliance Jio for Rs. 2,00,000 per month. GST would be levied on this amount @ 18%.
|Advertisement Charges||Rs. 2,00,000|
|(Add)||GST @ 18%||Rs. 36,000|
|Total Charges incl. GST||Rs. 2,36,000|
Mr. Karan Batra would be required to deposit this Rs. 36,000 with the Govt. stating in his GST Return that he has received Rs. 36,000 as GST from Reliance Jio.
GST on Print Ads
GST on Print Ads is levied @ 5%. GST on Print Ads is levied in the same manner as GST on Digital Ads except for the fact that the rate of GST is lower on print ads as compared to Digital Ads.
The manner of levy of GST on Print Ads can be explained with the help of an example.
For example: Times of India sells an advertisement to Flipkart for Rs. 5,00,000. GST on Ads @ 5% would be levied as follows:-
|Advertisement Charges||Rs. 5,00,000|
|(Add)||GST @ 5%||Rs. 25,000|
|Total Charges incl. GST||Rs. 5,25,000|
Times of India would be required to deposit this Rs. 25,000 with the Govt. stating that he has received Rs. 25,000 as GST from Times of India.
GST on Advertisement Agencies
In some cases – the advertiser hires an advertisement agency for the purpose of advertising. The advertisement agency acts on behalf of the advertiser and does all the work. In such cases, GST would be levied as follows:-
Case 1: Advertisement Agency buys advertisement on print media on its own name from the publisher and then sells it to the Advertiser.
For eg: An advertisement agency buys space from Times of India for Rs. 1,00,000 and then sells it to his client – Ola Cabs for Rs. 1,20,000. Times of India raised invoice to the advertisement agency for Rs. 1,00,000 and then the advertisement agency raises invoice on Ola Cabs for Rs. 1,20,000.
In such cases GST would be levied as follows
GST on Purchase by Ad Agency from Times of India- 5% on Rs. 1,00,000
GST on Purchase by Ola Cabs from Times of India- 5% on Rs. 1,20,000
Case 2: The advertisement agency does not buy the advertisement on its own name. The advertisement is purchased on the name of the client but the advertisement agency charges a fees/ commission from Times of India for facilitating this transaction.
For eg: An Advertisement Agency helps his client – Tata Motors to put an Advertisement on Times of India for Rs. 1,20,000. The invoice is prepared directly in the name of Tata Motors. The ad agency raises a separate invoice for its commission of Rs. 20,000 on Times of India for providing its service.
In such cases GST would be levied as follows:-
GST on Print Media Ad – 5% of Rs. 1,20,000
GST on Commission – 18% of Rs. 20,000
In both the above mentioned cases, if the advertisement agency charges any other fees for designing or drafting the advertisement and such fees is charged extra from the client, GST on such ads would be levied @ 18%.
In case the above 2 ads were published on Digital Media instead of Print Media – GST would be 18% in all the cases.
Invoice for GST on Ads
The person who is providing this service of Advertisement should raise a proper invoice for the same in accordance with the Invoice Rules clearly mentioning the
- Invoice Date
- Invoice Number
- Name and Address of Supplier
- Name and Address of Recipient
- GST No. of the Supplier & Recipient
- Several other details
There is no prescribed format by the govt for raising an invoice. The govt has only mandated that certain items are compulsory to be mentioned on all invoices. The place where these details are to be mentioned is not compulsory.
- Recommended Read: How and When to raise a GST Invoice – Explaining all Practical Scenarios
Other Relevant Points
- In case the seller of ad space is not registered in GST – he shall not charge GST from the client.
- The buyer of advertisement can claim the benefit of Input Tax Credit for the GST paid.
- In case the seller of Ad Space is registered outside India – GST would be levied on Reverse Charge Basis. In such cases – the Advertiser would not be required to deposit this GST with the Ad publisher but would be required to directly deposit the same with the Govt. (Recommended Read: Reverse Charge explained with Examples).
- In case the seller of Ad Space is registered outside and it is a case of OIDAR like Facebook Ads – GST would be levied in the manner as mentioned in this article – GST on OIDAR.