How GST will Impact Online Marketing?



Ever since its enforcement in India, there has been a furore over the new taxation system in India, GST (Goods and Services Tax). After a rough tussle between Centre and opposition parties, the latest tax regime has finally been implemented on 1July, 2017. And as anticipated, the market has been smitten with lot of reactions; good, bad and worse. Apart from various reactions, people are still in awe as they have vague idea what GST is and what impact it will have on the online marketing. So, let’s have a look at the pros and cons of nation’s much-talked tax regime:

What is GST?: GST is the indirect uniform tax system replacing all previous tax processes levied by the Centre and State governments. The previous tax system was supposedly complicated as there were several stages to cover. But the implementation of GST will make the whole procedure rather simpler as there will be only one single tax system. The purpose of GST is to rationalize the overall taxation system paving the way for economic stability— for growth and development.

The impact of GST on advertising: As the new tax system has been implemented, the market will have an impact. For example, as the advertising industry falls under the purview of service industry, according to GST council, there will be now 18% tax levied on advertising industry, instead of 15%. Hence, there will be a specific impact on Digital Advertising Industry. In the new tax regime, creating an ad will cost less as the cascading effects of the previous tax system will no longer be levied on each stage. Surely this will be more beneficial for companies while budgeting advertising.  

GST influence on digital marketing: The graph of various sites shows that the number of subscribers is always on the rise. And as the Telecom industry experts consider, that with the latest inventions of cutting-edge apps, it will cross even some of the developed countries in the coming days. According to economic experts, due to GST, companies will receive the input credits and may invest it strategically in overall investment.

One of the major advantages of investing in digital advertising is that one can easily measure the data, facts, feedbacks of products or brand. Hence, most companies will find it convincing to invest in paid ads. From the marketing point of view, digital advertising is way more cost-effective and easy to target its audience. Though, market experts also are of the opinion that the forecasts and benefits of GST will take little time before it starts to show results. They further say that only patience will bring good fortune to digital advertisers.

GST, boost to social media: According to digital marketing analysts, GST is a boon to the social media and SEO. Social media and SEO will be more in demands followed by email marketing and PPC. Even though the numbers are not so good compared to the active users on Internet, but the return of spending with costs spent on ads and average time spent by Internet users is much better. But jumping onto a conclusion now will be rather hasty; we should wait and watch till the companies respond to the latest changes.

The market is wobbly, economy is bumpy, yet market pundits are optimistic that GST will bring in some balance and stability in the economy.


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