By Salon360App

09/18/2025 Here’s some great news for the beauty and wellness industry, and salon clients in general. The GST council led by Finance Minister, Nirmala Sitharaman, has decided to cut the Goods and Services tax (GST) on beauty, wellness and physical well-being services from 18% to 5%, without Input Tax Credit (ITC). This move offers a much-awaited relief for salon professionals as well as their clients. This makes beauty, wellness and grooming services more affordable and accessible across the entire country. This rate will be effective from 22 September, 2025.
Self-care Made AffordableEarlier, salon services were taxed at 18%, which added a sizable amount to the already-high service costs. A lot of consumers even stopped going to luxury salons owing to the high GST. A lower GST definitely makes your services cheaper for your clients. When more people can afford to book, it surely means more business for you.
Besides beauty, the government has also extended tax relief to personal care products. This includes a lower GST on soaps, shampoos and other well-being essentials. It has shifted to the 5% slab from the earlier 12-18%.
This will entirely change the way salons and wellness businesses operate.
Though the new GST slab will apply from 22September, it’s important that salon owners are ready before this. It’s important that they update their salon billing software, and price lists so that there is no confusion later.
While it is a win-win for salon owners as well as clients, there is only one downside for salon owners. The 5% GST does not allow ITC. This means, salon owners cannot claim back the tax they pay on products, rent or equipment. This is particularly an important part for profit planning. Service providers lose out on ITC benefits. Small and medium neighbourhood salons can offer more competitive rates and increase their footfalls.
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