GST 2.0: What the New Slabs Mean for Service & Marketing Agencies

On September 3, 2025, the GST Council announced one of the most significant reforms since the introduction of Goods and Services Tax. The new framework reduces the four-rate system into just two slabs—5% and 18%—while retaining a special 40% rate for luxury and sin goods. The new structure will come into effect from September 22, 2025.

For industries built on creativity, strategy, and services like marketing and communications, this reform brings greater clarity in taxation and promises smoother compliance.

Core Marketing & Digital Services Stay at 18%

Most services central to VeRoMa Media’s work—such as:

●      Digital marketing campaigns

●      SEO and performance marketing

●      Social media management and influencer collaborations

●      Web design and creative development

●      AI-driven campaign tools

…are expected to remain under the 18% GST bracket. This means agencies and clients do not have to renegotiate contracts or overhaul budgets immediately. For now, campaign planning and creative investments continue without disruption.

A Possible 5% Relief for Outreach Services (Awaiting CBIC Notification)

Early industry discussion suggests that certain PR, communications, or awareness-driven campaigns—especially those designed for public interest (health, education, social impact)—may be considered for the 5% slab.

⚠ However, this reclassification has not yet been confirmed by the CBIC. Agencies and clients will need to watch upcoming notifications closely before recalibrating cost structures.

If confirmed, this shift could:

●      Lower the tax burden on NGOs, startups, and socially driven businesses.

●      Enable large-scale awareness campaigns to be executed more cost-effectively.

●      Create a competitive advantage for agencies offering PR and outreach services.

Simplified Compliance & ITC Management

One of the most immediate benefits of GST 2.0 lies in compliance. With only two slabs, Input Tax Credit (ITC) management becomes simpler. Agencies will face fewer classification disputes, less administrative overhead, and quicker reconciliation cycles.

For clients, this translates into:

●      Transparent invoices

●      Easier cost tracking

●      Faster billing processes

What It Means for Clients

●      Corporate brands: Stability in digital and creative marketing costs, as services remain at 18%.

●      Public institutions, NGOs, advocacy groups: Potential benefits if outreach services shift to 5%.

●      Startups & smaller businesses: Clearer tax structures and possible savings that can be reinvested into growth.

The Road Ahead

For agencies like VeRoMa Media, the immediate impact of GST 2.0 is stability and simplified compliance. The true opportunity lies in future notifications—if PR and awareness campaigns are indeed notified under the 5% bracket, agencies will be able to pass direct cost advantages to clients.

In essence: the creative business stays steady, compliance gets simpler, and potential tax savings for outreach may reshape how campaigns are delivered. GST 2.0 is not just reform—it’s the start of a more transparent, opportunity-driven era for service providers.

The final classification of services under GST 2.0 will depend on CBIC’s detailed notifications, which agencies like ours are monitoring closely.

veromamedia.com