Advertisement tax after GST: what you now pay

Start with the question most media owners answer wrongly. Can a municipal corporation still charge a brand advertisement tax on a hoarding. The short answer is no. The longer answer is that it can still charge you for the same hoarding under a different name, which is why the confusion survives.

Advertisement tax was subsumed, and that part is settled

The Constitution (101st Amendment) Act, 2016 omitted Entry 55 of List II of the Seventh Schedule, the State’s power to tax advertisements other than those in newspapers and those broadcast by radio or television, with effect from 16 September 2016. The Central Board of Indirect Taxes and Customs lists taxes on advertisements among the State levies subsumed under GST on its own page about the tax.

The mechanism is where the city-specific part begins. Omitting the entry removed the power. The State GST Acts then went into the municipal statutes and deleted the enabling provisions. Section 173 of the Uttar Pradesh GST Act, 2017 omitted section 172(2)(h) and sections 192 and 193 of the U.P. Municipal Corporation Act, 1959 with effect from 1 July 2017. In Maharashtra the GST Act repealed the Maharashtra Advertisements Tax Act, 1967. What each State deleted is not identical, which is why two High Courts can read the same amendment and land in different places.

What survived is a fee, and the courts have split

On 13 November 2025 the Allahabad High Court, in M/s Saffron Communication Pvt Ltd v. State of U.P., Writ Tax No. 813 of 2019, quashed a Nagar Nigam’s advertisement tax demand and recovery certificate for 2018 to 2019, following its earlier decision in Pankaj Advertising, which held such a levy to be without legislative or statutory competence and ultra vires. It also held a refund claim for 1 July 2017 to 12 February 2018 good in law, payable within three months and subject to unjust enrichment.

On 10 December 2025 the Bombay High Court went the other way on a differently labelled levy. In the batch led by Writ Petition No. 10684 of 2018, mostly against Pune Municipal Corporation, it held that the licence fee on sky signs and hoardings under sections 244 and 245 read with section 386(2) of the Maharashtra Municipal Corporation Act, 1949 is a regulatory fee and not a tax, that the omission of Entry 55 does not touch it, that the GST law repealed only the 1967 advertisement tax Act, and that the power traces to Entries 5 and 66 of List II read with Article 243X. The petitions were dismissed. The Karnataka High Court reached a similar conclusion on 21 April 2022 in Hubballi Dharwad Advertisers Association v. State of Karnataka, on section 134 of the Karnataka Municipal Corporations Act, 1976.

So the operating rule is not that advertisement tax is gone. It is that the tax is gone, the licence fee is not, and which one you are being charged turns on the State, the statute and the words printed on the demand.

What a city charges, and why no current figure is here

The Bombay judgment reproduces one city’s schedule across four decades. Pune’s licence fee is a rate per square foot per annum, higher for illuminated than for non-illuminated displays, revised repeatedly by corporation resolutions, with a separate scrutiny fee of five thousand rupees per application per year introduced on 17 June 2021. The court upheld the enhancement to two hundred and twenty two rupees per square foot per annum from 1 April 2013, ratified by General Body Resolution No. 667 dated 28 September 2018.

What Pune charges today we could not confirm, so it is not printed here. The same judgment records later resolutions at higher rates, a State communication revising the position, and a comparable Nagpur revision that was suspended. The court upheld the power to fix and revise, not a number. Ask the corporation for its current published schedule in writing, and date the copy.

The GST, and only the out-of-home specifics

Out-of-home advertising is a service taxed at eighteen percent under service code 998361. The five percent rate applies to selling space for advertisement in print media, and a hoarding is not print media. Each leg carries its own tax. The media owner invoices the agency or the brand, the agency invoices the brand, and whether the agency buys media in its own name or acts as a pure agent changes what the brand’s invoice can show.

Credit is available. Advertising is not in the blocked list in section 17(5) of the CGST Act. The mechanics of claiming it belong to gst input credit for ecommerce sellers rather than here. What is specific to out-of-home is narrower.

• Place of supply follows your registration, not the board. For a registered recipient it is your location. A hoarding in Mumbai billed to a Gurugram registration is an inter-state supply carrying integrated tax. If a vendor charges the State tax of the State the board stands in and you hold no registration there, that credit is lost.
• Government campaigns split by State. Where the buyer is the Central Government, a State Government, a statutory body or a local authority, section 12(14) of the IGST Act makes the place of supply each State named in the contract, apportioned under Rule 3 of the IGST Rules.
• The municipal fee leg differs. Services supplied by a local authority to a business entity generally sit under reverse charge, entry 5 of Notification 13/2017-Central Tax (Rate) dated 28 June 2017, with carve-outs including renting of immovable property. We found no ruling applying that entry specifically to an advertisement licence fee, so confirm your own position rather than inferring it.

Payments to the agency or media owner also carry contract tax deducted at source under section 194C of the Income-tax Act, 1961, a separate subject from the marketplace withholding covered in tcs and tds for marketplace sellers.

Government sites: tax, fee, concession or rent

On a bus shelter or a station the money is usually not a tax at all, and the label decides the invoice. Keep four things apart. A licence or permission fee under the municipal Act, which section 386(2) in Maharashtra calls exactly that. Ground rent, where land or a structure is leased, which Mumbai’s policy defines separately from licence fees. A concession payment, where the site is won at e-tender or granted against operating and maintaining a public utility, which Mumbai’s 2025 policy introduces for corporation premises. And in the narrow railway case, nothing: section 185 of the Railways Act, 1989 means no advertisement tax is payable to a local authority unless the Central Government notifies it, and the Bombay High Court recorded in December 2017 that no such notification existed. Delhi Metro’s licence agreement states that no lease, tenancy or sub-tenancy is created, which is the drafter telling you it is a licence fee and not rent.

What to insist the invoice shows

• Your correct GSTIN, for the State you intend to claim from, and the supplier’s.
• The service code and the tax split, central and state tax or integrated tax, consistent with the place of supply rule.
• One line per site, with the permission reference and the display period.
• Any municipal licence fee, ground rent or concession payment shown for what it is, not folded into the media line.
• Anything collected as a pure agent identified as such.

Which is why an all inclusive lump sum is a problem rather than a convenience. You cannot tell what tax was charged on what, you cannot match the line to the vendor’s return, and if part of the sum was a statutory fee recovered as a reimbursement the vendor may never have charged GST on it while invoicing you one taxable value. Reading rate cards and benchmarking vendor pricing is the companion discipline on the commercial side. Make the tax on out-of-home spend countable, or accept that part of it is a cost and not a credit.