Why the Indian Media Industry Can't Celebrate GST 2.0

Everyone is discussing the new GST reforms, which include simplified tax slabs, cheaper TVs, and more affordable essentials. But if you work in television, news, publishing, or advertising in India, you likely feel overlooked. Despite numerous appeals and valid concerns, the media industry received no significant relief. Let’s break down what happened and what it means.

1. What Did the Media Industry Want and Why?

Media and advertising groups like the Association of Indian Magazines (AIM), the News Broadcasters & Digital Association (NBDA), and the Outdoor Advertising Association (IOAA) approached the government with these requests:

• Tax parity: Printed newspapers and magazines are exempt from GST, but digital editions get taxed at 18%. Industry leaders called for a fairer structure.
• Shift in tax payment timing: Broadcasters wanted to pay GST only after getting payments, not when invoicing—especially for government clients who often delay payments.
• Input Tax Credit (ITC) access: Costs like vehicle hire, catering, employee insurance, and other essentials don’t currently qualify for ITC. This prevents cost recovery and raises operational expenses.

2. What Did the GST Council Approve and What Was Left Out?

At the 56th GST Council meeting, major reforms were announced, including:

• Elimination of the 12% and 28% slabs, replaced with just 5% and 18%.
• Reduction in GST on TVs larger than 32″ from 28% to 18%, encouraging consumer adoption and increasing OTT viewership.
• Movie tickets up to ₹100 are now taxed at 5% (down from 18%), although tickets priced over ₹100 remain at 18%.

However, for media businesses:

• No GST reduction on digital publications, broadcasters, or outdoor media.
• No changes to ITC restrictions.
• No relief in tax payment terms for delayed payments.

3. Why This Is a Major Setback

Worsening the Digital Divide:

Taxing digital editions at 18% while print remains exempt makes reading more expensive for online users, especially in tier-II and tier-III towns.

Liquidity Pressure from Tax Timing:

Broadcasters must pay GST upfront on invoices, even when government payments are delayed. This puts a strain on working capital and slows growth.

Blocked Cost Recovery from Inputs:

With ITC unavailable for several business expenses, costs go up significantly, making media operations more expensive than in other sectors.

4. Who Got Relief and Who Didn’t?

The new GST structure clearly favored:

• Consumers: Lower rates on essentials and electronics.
• Households & MSMEs: Reduced burden on everyday goods and services.
• Entertainment (partially): Lower tax on small-ticket movie sales.

But media sectors were left out, even though they are vital to democracy and the advertising-driven economy.

5. The Takeaway

Final Thoughts

While GST 2.0 provides relief to consumers and several industries, it offers little hope for the Indian media sector. The government’s hesitation to address digital parity, ITC restrictions, and cash flow challenges may slow growth and innovation in publishing, broadcasting, and advertising.

The message is clear: the media industry needs focused reforms to survive and thrive in the changing tax environment.

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