Looking for expert help with GST and income tax for outdoor advertising and hoarding agencies India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Billboard and hoarding space is taxed at 18% GST under SAC 998366 (Notification 11/2017-Central Tax (Rate), S. No. 21(ii)). The 5% rate is only for print media space.
- Rent paid to an unregistered owner for a rooftop or wall site is taxed under reverse charge in your hands at 18% (Notification 13/2017-Central Tax (Rate), S. No. 5AB), and the credit comes back to you.
- Input tax credit on hoarding structures fixed to a concrete foundation may be blocked under Section 17(5)(d) of the CGST Act. Movable frames, flex and printing are not caught.
- Clients deduct contract TDS at 1% (individual or HUF) or 2% (firm or company), because advertising is "work" under Section 194C of the 1961 Act and Section 402(47)(a) of the 2025 Act.
- Audited agencies must file the AY 2026-27 return by 21 November 2026 (CBDT Circular 07/2026).
What is the GST rate on hoarding advertising in India? Selling advertising space on hoardings, billboards, building walls and vehicles is taxed at 18% GST: 9% CGST plus 9% SGST, or 18% IGST. CBIC classifies it as SAC 998366, "sale of other advertising space or time". The rate entry is heading 9983, S. No. 21, item (ii) of Notification 11/2017-Central Tax (Rate). Only print media space gets 5%.
An outdoor media business looks like a simple one: you hold sites, you sell months of display to brands. But one hoarding throws up five tax questions. What GST do you charge the brand? Who pays GST on the terrace rent? Can you claim credit on the steel frame? How much TDS will the client cut? And can you file on presumptive income? This guide answers each one, using the GST rules in force from 22 September 2025 and income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the matching sections of the Income-tax Act 2025 that apply from 1 April 2026.
Which GST rate and SAC code apply to hoarding space?
18%, under SAC 998366. CBIC's Explanatory Notes to the Scheme of Classification of Services say this code "includes sale of advertising space on billboards, buildings, vehicles, etc." The rate comes from Notification 11/2017-Central Tax (Rate), heading 9983, S. No. 21. Item (i) of that entry, "selling of space for advertisement in print media", is taxed at 2.5% central tax (5% in all). Everything else under heading 9983 falls in item (ii) at 9% central tax (18% in all). Notification 15/2025-Central Tax (Rate), which changed many service rates from 22 September 2025, rewrote the wording of item (ii) but kept it at 9%.
Comparison
GST Codes and Rates for an Outdoor Advertising Business
| What you bill | SAC | GST | Source |
|---|---|---|---|
| Display months on your own or leased hoardings, unipoles, building wraps, bus shelters | 998366 | 18% | Notif 11/2017-CT(R), S. No. 21(ii); CBIC Explanatory Notes |
| Booking hoardings owned by others, earning a commission | 998362 | 18% | Notif 11/2017-CT(R), S. No. 21(ii) |
| Full campaign: concept, design, media planning and placement | 998361 | 18% | Notif 11/2017-CT(R), S. No. 21(ii) |
| Ad space in newspapers, magazines, brochures, posters and other printed matter | 998363 | 5% | Notif 11/2017-CT(R), S. No. 21(i) |
| Site rent paid to an unregistered owner (you pay) | Rent | 18% under reverse charge | Notif 13/2017-CT(R), S. No. 5AB |
Source: Notification 11/2017-Central Tax (Rate) as amended by 15/2025-Central Tax (Rate); Notification 13/2017-Central Tax (Rate) as amended by 09/2024 and 07/2025; CBIC Explanatory Notes to the Scheme of Classification of Services
A poster on a hoarding is not "print media". The 5% code mentions posters, but that is ad space sold inside a printed product. A flex sheet pasted on your billboard is still billboard space under 998366, so it stays at 18%.
Example: a Hyderabad retailer books one 40 ft by 20 ft hoarding on a main road for three months at Rs 60,000 a month. Your taxable value is Rs 1,80,000. The retailer is registered in Telangana, as are you, so you charge CGST at 9% (Rs 16,200) and SGST at 9% (Rs 16,200). The invoice total is Rs 2,12,400, and the retailer can take the Rs 32,400 as credit.
Who pays GST on site rent and municipal fees?
Most of your costs are the sites themselves. The GST answer changes with who you pay.
Step-by-Step Guide
GST on What You Pay for a Hoarding Site
1. Owner is registered under GST
The owner charges 18% on the rent invoice. You claim it as input tax credit.
2. Owner is unregistered, you are registered (not composition)
You pay 18% on the rent under reverse charge (Notification 13/2017-CT(R), S. No. 5AB, from 10 October 2024). Pay it in cash in GSTR-3B and claim the same amount as credit.
3. You are under the composition scheme
S. No. 5AB does not apply to you (Notification 07/2025-CT(R), from 16 January 2025). Pay the rent without GST.
4. You pay a municipality or other government body
Services of a local authority to a business entity are taxed under reverse charge in your hands (S. No. 5). Renting of immovable property by government to a registered person is under reverse charge too (S. No. 5A).
Source: Notification 13/2017-Central Tax (Rate), S. Nos. 5, 5A and 5AB, as amended by Notifications 3/2018, 09/2024 and 07/2025-Central Tax (Rate)
S. No. 5AB covers "renting of any property other than residential dwelling". In our reading, a terrace or side wall let out to carry a hoarding is not the renting of a residential dwelling, even on a residential building, because nobody is renting it to live in. Get the owner's PAN and a written lease that names the site, so the reverse charge figure ties to a document.
Example: you pay an unregistered building owner Rs 25,000 a month for the terrace. Each month you pay Rs 4,500 of reverse charge GST (18% of Rs 25,000) in cash, and claim Rs 4,500 of credit in the same return. The net cost is nil, but skip the cash payment and you lose the credit and owe interest. Our reverse charge guide shows how to report it in GSTR-3B.
Municipal hoarding payments come under many names: licence fee, permission fee, advertisement fee. Read the order before you decide which entry applies. A fee for a service or for use of a site is taxed under reverse charge as above. A levy that is a tax in its own right is not consideration for a supply.
Can you claim credit on hoarding structures?
On flex, vinyl, printing, lighting and site rent, yes, in the normal way. On the structure itself, it depends on how it stands.
Section 17(5)(d) of the CGST Act blocks credit on "goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account". Explanation 2 to Section 17(5), inserted by the Finance Act 2025, makes clear that "plant or machinery" in clause (d) means "plant and machinery". That term is defined in the Explanation to Section 17 as "apparatus, equipment, and machinery fixed to earth by foundation or structural support" used for making outward supplies, including the foundation, but excluding "land, building or any other civil structures".
- A frame bolted to a terrace or wall that can be taken down and moved: it isn't immovable property, so clause (d) doesn't bite. Claim the credit.
- A unipole or gantry on a concrete foundation: the question is whether it is equipment fixed to earth (credit allowed) or a civil structure (credit blocked). The Act doesn't name hoardings either way. Keep the fabrication bills, drawings and foundation details, and take advice before claiming a large credit.
Our GST input tax credit guide covers the general Section 16 conditions, such as the supplier's invoice showing in GSTR-2B.
Registration, composition and government clients
Registration. You must register once aggregate turnover crosses Rs 20 lakh in a financial year, or Rs 10 lakh in a special category state (Section 22(1), CGST Act). The higher Rs 40 lakh limit is for goods suppliers only. In practice brands want a tax invoice so they can claim credit, so most agencies register from day one. Our GST registration service handles the application, and the turnover limit guide explains what counts.
Composition rarely suits you. The 6% scheme for service providers (Section 10(2A), CGST Act, with Notification 2/2019-Central Tax (Rate)) needs last year's aggregate turnover within Rs 50 lakh and no inter-State outward supplies. Under Section 10(4), you also can't collect tax from the client, so your client gets no credit. Most brand clients will pass you over for a regular registered agency. See our composition scheme guide for every condition.
Government campaigns. State departments, municipalities and public sector agencies book a lot of outdoor space. Under Section 51 of the CGST Act, they deduct 2% GST TDS (1% CGST plus 1% SGST) when the taxable value under a contract exceeds Rs 2,50,000. Check the deductions on the GST portal each month and accept them, so the credit reaches your electronic cash ledger and can be used to pay tax.
Income tax and TDS for hoarding agencies
Section 44AD usually works for site owners. If you sell display on sites you own or lease, you are selling your own service, not acting as anyone's agent. For FY 2025-26, Section 44AD of the 1961 Act applies up to Rs 2 crore of turnover, or Rs 3 crore if cash receipts stay within 5%. You declare at least 6% of receipts by bank or digital mode and 8% of the rest. Section 58 of the 2025 Act carries the same limits from 1 April 2026.
Two cautions. First, 44AD is not open to "a person earning income in the nature of commission or brokerage" or "a person carrying on any agency business" (Section 44AD(6)(ii), (iii); Section 58(11)(a)(iv), (v) of the 2025 Act). If part of your income is commission for booking other owners' hoardings, keep books for the business. Neither Act defines "agency business", so the word "agency" in your trade name doesn't settle it either way. Second, high site rents can push your real margin below 6%. If you declare less than the presumptive figure and your income is above the basic exemption limit, you need books and a tax audit (Section 44AD(5); Section 58(3) of the 2025 Act).
Example (proprietor, new tax regime, FY 2025-26): turnover Rs 1.4 crore, all received by bank transfer. Presumptive income at 6% is Rs 8,40,000.
- Rs 0-4 lakh: nil.
- Rs 4-8 lakh at 5%: Rs 20,000.
- Rs 8-8.4 lakh at 10%: Rs 4,000.
- Tax before rebate: Rs 24,000. Income is within Rs 12 lakh, so the Section 87A rebate of up to Rs 60,000 wipes it out. Tax payable: nil.
Tax Rate Chart
New Tax Regime Slabs, FY 2025-26 (AY 2026-27)
Up to Rs 4 lakh
Rs 4-8 lakh
Rs 8-12 lakh
Rs 12-16 lakh
Rs 16-20 lakh
Rs 20-24 lakh
Above Rs 24 lakh
Source: Section 115BAC(1A), Income-tax Act 1961, as amended by Finance Act 2025
Our Section 44AD guide explains the scheme in full. Section 44ADA is not an option: advertising is not one of the professions listed in Section 44AA(1) of the 1961 Act or Section 62(4) of the 2025 Act.
TDS your clients deduct. Section 194C of the 1961 Act says "work" includes "advertising", and Section 402(47)(a) of the 2025 Act repeats it. So a company, firm or other specified payer deducts contract TDS:
Comparison
TDS on Hoarding Agency Payments
| Payment | Rate | Threshold | 1961 Act (to 31 Mar 2026) | 2025 Act (from 1 Apr 2026) |
|---|---|---|---|---|
| Client pays you for display, you are an individual or HUF | 1% | Rs 30,000 per bill or Rs 1,00,000 in the year | Section 194C | Section 393(1), Table Sl. No. 6(i) |
| Client pays you for display, you are a firm or company | 2% | Rs 30,000 per bill or Rs 1,00,000 in the year | Section 194C | Section 393(1), Table Sl. No. 6(i) |
| You pay site rent, you are a firm, company or a proprietor with business turnover above Rs 1 crore last year | 10% for land or building; 2% for plant or equipment | Rs 50,000 for a month or part of a month | Section 194-I (payer test is tied to the Section 44AB audit limits) | Section 393(1), Table Sl. No. 2(ii) |
| You pay site rent, you are any other individual or HUF | 2% | Rs 50,000 for a month or part of a month | Section 194-IB | Section 393(1), Table Sl. No. 2(i) |
Source: Income-tax Act 1961 ss. 194C, 194-I; Income-tax Act 2025 s.393(1) Table Sl. Nos. 2 and 6, s.402(11), (29), (37), (47)
On the Rs 1,80,000 retailer booking above, a proprietor agency would see Rs 1,800 deducted (1%) if the client deducts on the pre-GST value. A terrace rent of Rs 25,000 a month is below the Rs 50,000 monthly threshold, so no TDS applies to it. Our TDS on contractor payments guide and TDS on rent guide cover the rest. If you do deduct, our TDS filing service files the quarterly returns.
Deadlines right now. If your FY 2025-26 accounts were audited, the return is due by 21 November 2026 (CBDT Circular 07/2026). If you weren't liable to audit and missed 31 July or 31 August, a belated return under Section 139(4) can be filed until 31 December 2026, with a late fee of Rs 5,000, or Rs 1,000 if total income is within Rs 5 lakh (Section 234F).
Common mistakes hoarding agencies make
- Charging 5% because the ad is printed. The 5% entry is for space in print media. Billboard space is 18% whatever the creative is made of.
- Skipping reverse charge on terrace rent. If the owner is unregistered and you are a regular registered agency, the 18% is yours to pay under S. No. 5AB. Credit only comes after you pay it.
- Claiming credit on a concrete-founded unipole without checking. Section 17(5)(d) can block it, and a wrong claim has to be reversed with interest.
- Filing on 44AD with commission income. If you also earn commission for booking others' sites, that income is outside the scheme. Keep books.
- Ignoring TDS credit. Brands, ad agencies and government departments deduct under different rules. Match income tax TDS in Form 26AS and AIS, and GST TDS in your cash ledger, every quarter.
How Tax Garden helps outdoor media businesses
We set up your invoices with the right SAC for each kind of booking, pay reverse charge on site rents every month, and file your GST returns on time. Our accounting and bookkeeping service keeps site-wise rent, structure and income ledgers, so you can see which hoardings make money. At year end we file through our ITR filing service. For related topics, see our guides to GST on advertising services, income tax for printing press owners and GST for coworking space operators.
