Content production agencies supply a mix of services that are individually ordinary but collectively raise a classification question. Video production, content writing, copywriting, social media content, design, editing and post-production are all taxable at 18% where the supplier is registered and the recipient is in India. The registration threshold is ₹20 lakh for a service provider, or ₹10 lakh in the special category states specified for services. The technical difficulty for an agency is not the rate on any single service; it is the treatment of a bundled production retainer, the classification of the principal supply, and the documentation required to support input tax credit across a multi-vendor cost structure.
The Rate and the Scope of Content Production
The 18% rate applies to video production, ad film production, content writing, copywriting, SEO content, technical writing, social media content, ghostwriting, post-production, editing and motion graphics. The rate does not change because the deliverable is digital or because the service is supplied on a retainer rather than a project basis. Where the service is supplied to a registered person in India, CGST and SGST apply for intra-state supplies and IGST for inter-state supplies.
SAC classification should match the substance of the work. Content writing and copywriting are commonly classified under SAC 998392, while television programme production and content supply may fall under SAC 998464. The agency should not use a single generic SAC for a multi-disciplinary offering without considering whether the principal supply is being accurately described.
Composite Supply and the Principal-Supply Question
A content production agency frequently supplies a bundle that includes scripting, shooting, editing, design, copywriting and project management for a single price. The classification question is whether the bundle is a composite supply with a principal supply, or a mixed supply of separable deliverables. In a composite supply, the bundle takes the rate of the principal supply. In a mixed supply, the bundle takes the rate of the component attracting the highest rate.
Where the dominant purpose of the engagement is video production and the writing and design components are incidental to that production, the agency has a reasonable basis for treating the bundle as a composite supply of production services. Where the agency supplies genuinely separate deliverables for a single price—for example, a brand video plus a standalone content strategy plus a separate website copy package—the mixed-supply analysis becomes more relevant. The practical discipline is to align the invoice with the scope of work and to avoid artificial splitting of a single production engagement into separately priced components to obtain a lower rate on part of the consideration.
Input Tax Credit Across a Subcontracted Cost Structure
Content production agencies typically incur GST on equipment, studio rental, software subscriptions, freelance talent, location costs and post-production facilities. The eligibility of input tax credit depends on whether the input is used in the course or furtherance of business, whether the invoice is in the name of the registered person, and whether the input falls within a blocked category under Section 17(5) of the CGST Act.
Freelance payments require particular attention. Where the freelancer is registered under GST, the agency should obtain a tax invoice with the correct GSTIN and description. Where the freelancer is unregistered and the payment is below the applicable threshold, the agency cannot claim credit on that input. Where the agency is required to pay under reverse charge for a specified service, the credit position must be analysed separately.
Equipment purchased in the name of the agency is ordinarily eligible, subject to the general conditions. Software subscriptions used for production are input services and are ordinarily eligible where the invoice is in the agency’s name. The agency should maintain a vendor master with GSTIN status, invoice references and the nature of the supply, because a production engagement can involve a large number of small vendors and the credit reconciliation burden is correspondingly high.
Export of Content Production Services
Foreign clients can qualify for zero-rated treatment, but the Section 2(6) conditions must be satisfied cumulatively. The supplier must be in India; the recipient must be outside India; the place of supply must be outside India; payment must be in convertible foreign exchange or permitted Indian rupees; and the supplier and recipient must not be establishments of the same person. A foreign client paying in dollars does not, by itself, make the supply an export.
Where the conditions are met, the agency may export under a LUT in Form GST RFD-11 without payment of IGST and claim refund of eligible accumulated ITC, or pay IGST and claim refund. The place-of-supply analysis for production services can be fact-sensitive where the shoot occurs in India for a foreign recipient or where the foreign recipient has an Indian establishment. The establishment condition is particularly important for agencies that serve foreign affiliates of Indian groups.
What the Content Production Agency Should Control
The agency’s GST position is determined by three variables: whether a bundled retainer is genuinely composite or mixed; whether the SAC and invoice description match the substance of the principal supply; and whether the ITC documentation across a multi-vendor cost structure is complete. The agency that controls these variables is in a stronger position than one that discovers the issues when a credit is challenged.
Call to Action: We advise content production agencies, creative studios and media businesses on GST classification, composite-supply analysis, vendor ITC documentation and export compliance. For a structured review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.