New GST on Digital Marketing Services: Tax Rates & Input Credit Explained
- Digital marketing services in India are taxed under GST at a rate of 18%.
- Businesses can claim Input Tax Credit (ITC) on GST paid for digital marketing if used for business purposes.
- Freelancers must register for GST if their turnover exceeds ₹20 lakh and collect GST from clients.
- Specific SAC codes like 998361 are used for GST billing in digital marketing services.
- GST is applicable to foreign services like Google Ads, with payment under the Reverse Charge Mechanism.
With businesses rapidly shifting to online platforms, digital marketing services have become essential for brand visibility and growth. Whether it’s social media advertising, SEO, influencer marketing, or email campaigns, these services fall under the GST regime in India. In this blog, we’ll explain the GST on digital marketing services, applicable tax rates, SAC codes , and how businesses can claim Input Tax Credit (ITC) on such services.
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New GST Rate on Digital Marketing Services in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common digital marketing services (no compensation cess).
| Type of Digital Marketing Service | New GST Rate |
|---|---|
| SEO, SEM, SMM, Content Marketing | 18% |
| Paid Advertising (Google, Meta, etc.) | 18% |
| Influencer Marketing | 18% |
| Email and WhatsApp Marketing | 18% |
| Web Analytics, Branding Services | 18% |
Type of Digital Marketing Service
New GST Rate
Type of Digital Marketing Service
New GST Rate
Type of Digital Marketing Service
New GST Rate
Type of Digital Marketing Service
New GST Rate
Type of Digital Marketing Service
New GST Rate
Are Digital Marketing Services Taxable Under GST?
Yes. As per GST law, digital marketing is a taxable service. It includes a wide range of online promotional activities and is categorized under professional or business support services.
Whether you’re hiring an agency or a freelancer, the GST for digital marketing services is applicable if the service provider is registered under GST.
Old GST Rate on Digital Marketing Services
(Old GST Rates – Applicable Until 21st September)
All forms of digital marketing—whether strategy, execution, or platform-based promotions—are taxed at a standard rate of 18%.
| Type of Digital Marketing Service | GST Rate |
|---|---|
| SEO, SEM, SMM, Content Marketing | 18% |
| Paid Advertising (Google, Meta, etc.) | 18% |
| Influencer Marketing | 18% |
| Email and WhatsApp Marketing | 18% |
| Web Analytics, Branding Services | 18% |
Type of Digital Marketing Service
GST Rate
Type of Digital Marketing Service
GST Rate
Type of Digital Marketing Service
GST Rate
Type of Digital Marketing Service
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Type of Digital Marketing Service
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SAC Code for Digital Marketing Services
| Service | SAC Code | GST Rate |
|---|---|---|
| Digital Marketing (All categories) | 998361 | 18% |
| Online Ad Campaigns | 998365 | 18% |
Service
SAC Code
GST Rate
Service
SAC Code
GST Rate
Refer to correct SAC code list for proper GST billing and ITC filing.
GST Compliance for Digital Marketing Agencies and Freelancers
Agencies:
- Must issue GST-compliant invoices
- Collect 18% GST from clients
- File monthly/quarterly GST returns
- Claim ITC on input services like ad spend, tools, software, etc.
Freelancers:
- Must register under GST if turnover exceeds ₹20 lakh (₹10 lakh in special category states)
- Collect and pay GST if registered
- Eligible to claim ITC on business-related expenses
Explore related options under GST Composition Scheme if you’re a small service provider.
Input Tax Credit (ITC) on Digital Marketing
Businesses that use digital marketing services to promote their products or services can claim ITC on the GST paid, provided:
- The service is used for business purposes
- You have a valid GST invoice with SAC and GSTIN
- Your supplier has filed their GST returns properly
Common ITC claims include:
- Payments to digital marketing agencies
- Subscriptions to SEO or analytics tools
- Platform charges (Google Ads, Facebook Ads)
Know more at ITC eligible expenses under GST .
Place of Supply and Reverse Charge Implications
If digital marketing services are availed from an overseas agency (e.g., a US-based freelancer), GST is payable under Reverse Charge Mechanism (RCM) by the recipient in India.
This ensures GST revenue is collected even when the supplier is not located in India.
Conclusion
The GST on digital marketing services is uniformly set at 18%, making it easy for businesses and service providers to calculate taxes. Whether you’re outsourcing to an agency or running in-house campaigns, proper GST compliance ensures you can claim ITC and reduce your net tax burden. As digital marketing continues to grow, staying updated with SAC codes , billing norms, and reverse charge rules is crucial for smooth operations and cost efficiency.
