Karnataka HC Rules Ad Tax Cannot be Imposed on Non-Commercial Signages by Educational Institutions

The Karnataka High Court set aside Bruhat Bengaluru Mahanagara Palike’s (BBMP) advertisement tax demand against Gupta Education Trust, ruling that non-commercial institutional signage is not taxable.

The court stated that Section 134 of the Karnataka Municipal Corporation Act, 1976, does not permit a tax on non-commercial signage displayed by educational institutions on their property.

Justice Sachin Shankar Magadum found the signage was purely for institutional identification and lacked any commercial or promotional content, and thus did not fall under the definition of advertisement in the BBMP Advertisement Bye-laws, 2006.

The tax order was quashed, and the exemption was directed to be reconsidered.