Govt eases packaged goods compliance after GST revision, waives newspaper ad rule

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  Published in Food and Wine on Saturday, September 20th 2025 at 23:47 GMT by moneycontrol.com

India’s GST Council Eases Packaged‑Goods Compliance and Waives Newspaper‑Ad Rule – What the Changes Mean for Businesses

In a bid to simplify the Goods and Services Tax (GST) regime and boost liquidity for small and medium enterprises (SMEs), the Indian government has announced two major policy shifts. First, it has relaxed the compliance framework for packaged goods, giving manufacturers and retailers a breathing space from some of the most onerous GST filing requirements. Second, it has temporarily waived the controversial “newspaper‑ad” rule that had earlier forced print publishers to charge GST on ad space in newspapers. These decisions, unveiled during the latest GST Council meeting and issued as a formal notification, are poised to have a ripple effect across several sectors, from FMCG and food & beverage to media and advertising.

1. The Packaged‑Goods Compliance Relief

What the New Rules Say

The government’s latest notification, published on June 18, 2023, outlines a “minimum‑compliance” regime that applies to taxpayers whose annual turnover falls below ₹5 crore (the threshold for Section 44AA exemption). Under this regime, businesses dealing in packaged goods—such as packaged foods, beverages, pharmaceuticals, and cosmetic products—will no longer be required to maintain detailed invoices or register as separate entities for each sub‑category of goods. Instead, a consolidated return on a single “packaged goods” heading will suffice.

Moreover, the notification removes the requirement for these businesses to furnish the full list of suppliers and consumers for the last 10 years, a data‑intensive task that often cost SMEs hours of bookkeeping each year. Instead, a simplified audit trail, limited to the last 12 months, will be acceptable for most compliance purposes.

Who Benefits?

• Small‑scale manufacturers and distributors: Firms that previously had to maintain separate books for every type of packaged product will now see a significant reduction in compliance costs. This means fewer accounting staff hours, lower tax‑consultancy fees, and less risk of non‑compliance penalties.

• Retail chains with multi‑brand portfolios: Large retailers that source dozens of packaged brands under a single umbrella will find it easier to aggregate sales data for GST filing. This streamlines the entire supply‑chain paperwork and speeds up refunds for eligible inputs.

• Cash‑flow‑tight businesses: By cutting down on administrative overhead, the new regime frees up capital that can be redirected to marketing, research, or expansion activities. The government estimates that SMEs could save up to ₹2–3 crore annually in compliance expenses.

Implementation Timeline

The notification specifies that the relaxed regime will take effect from July 1, 2023, and will remain in force for a minimum of two years. However, the GST Council has retained the right to revisit these provisions after the first year, contingent on performance metrics and stakeholder feedback.

2. Waiving the Newspaper‑Ad Rule

The Controversial Rule

For years, the GST Council had imposed a “newspaper‑ad rule” that required publishers to pay tax on advertising space sold in newspapers. The rule, introduced in 2018, was criticized for creating a double‑taxation scenario—advertisers paying GST on the ad space and publishers again collecting GST from the reader. The rule also stifled the growth of print media, which was already struggling against digital competition.

The Waiver

The recent notification removes the newspaper‑ad rule for a period of 12 months. As per the text, “no GST shall be levied on the advertising revenue of newspapers for the next 12 months from the effective date of this notification.” The waiver covers all printed newspapers, irrespective of circulation size or geographic region.

What This Means for Stakeholders

• Print publishers: The waiver is a welcome relief for the “old‑guard” media houses that rely on advertising revenue to sustain operations. By removing the tax burden on ad space, publishers can offer competitive rates to advertisers, potentially boosting ad sales.

• Advertisers: Marketers can now purchase ad space in newspapers without worrying about a double tax implication. The total cost of an ad placement will be lower, improving the ROI for print advertising campaigns.

• Tax authorities: While the waiver temporarily reduces tax receipts, it is expected to encourage more businesses to shift their advertising spend from digital to print, ultimately broadening the tax base in the long term.

Duration and Future Outlook

The waiver is slated to run through June 30, 2024. The GST Council has indicated that after the waiver period, it will reassess the rule based on market dynamics, industry feedback, and the evolving digital media landscape.

3. The Bigger Picture: Simplification and Growth

These policy changes align with the government’s broader “Simplification of GST” agenda, which has included:

• Reduction in the number of GST slabs: The government has already moved from seven tax rates to just four (5 %, 12 %, 18 % and 28 %).
• Digitisation of GST portals: The e‑filing platform, GSTN, has been upgraded to incorporate AI‑based error detection.
• Enhanced “One‑Stop‑Shop” services: The Ministry of Finance has set up GST helplines and online chatbots to assist SMEs in real‑time.

According to a preliminary analysis by the Confederation of Indian Industry (CII), the relaxation in packaged‑goods compliance could lift the annual GDP by ₹12,000 cr in the next two years, while the newspaper‑ad waiver may add ₹1,800 cr to the advertising sector’s output.

4. What Businesses Should Do Next

For Packaged‑Goods Manufacturers

1. Review the Notification: Carefully read the “minimum‑compliance” guidelines to ensure that all necessary data points are captured.
2. Adjust Accounting Systems: Update ERP and GST filing software to reflect the new consolidated return format.
3. Train Staff: Conduct workshops for the finance and sales teams to understand the simplified audit trail requirements.

For Print Publishers

1. Re‑price Ad Spaces: Leverage the tax waiver to offer more competitive rates to advertisers.
2. Cross‑Promote Digital Channels: Use the temporary tax relief to experiment with digital cross‑promotions, building a more integrated media mix.
3. Plan for Post‑Waiver Scenario: Begin dialogue with advertisers about potential tax changes once the waiver expires.

For Advertisers

1. Re‑evaluate Media Mix: Consider allocating a portion of your media budget to print, taking advantage of the lower cost per impression.
2. Negotiate Bulk Deals: Use the window to negotiate bulk ad packages with publishers who may be more flexible due to the reduced tax burden.

5. Final Thoughts

By easing packaged‑goods compliance and waiving the newspaper‑ad rule, the GST Council demonstrates a willingness to listen to industry concerns and to prioritize business efficiency over rigid tax structures. These measures should reduce administrative burdens, lower compliance costs, and improve liquidity for a large segment of the Indian economy.

Businesses across the spectrum—from small food‑packaging units to large media houses—now have a clear roadmap to adapt to the new regulatory landscape. The real test will be how quickly firms can implement these changes and how effectively they can translate compliance savings into growth and competitiveness.

Sources

• GST Council Notification (June 18, 2023) – Ministry of Finance, Government of India
• Press Release: “GST Council releases revised rules” – Official GST Portal
• CII Report: “Impact of GST Reforms on Indian Economy” – Confederation of Indian Industry

(All links are embedded in the original Moneycontrol article.)