GST Registration for Salons, Beauty Parlours and Spas in India (2026): 5% Rate, Rules and Compliance

GST is one of the most misunderstood parts of running a salon. Rates changed in 2025, many owners still follow advice written for the 18% era, and small mistakes on invoices or returns lead to notices, late fees and lost money. This guide explains GST for salons and beauty parlours in India as it stands in 2026: what to charge, when to register, how to register, how to bill and what to file. It replaces our older GST registration article and our earlier GST compliance checklist, so everything is now in one place.

GST rate on salon and beauty parlour services in 2026

At the 56th GST Council meeting in September 2025, the Council recommended reducing GST on beauty and physical well-being services from 18% to 5%. The new rate applies from 22 September 2025, and the Central Board of Indirect Taxes and Customs (CBIC) clarified that the 5% rate comes without input tax credit (ITC). This covers the everyday work of salons, barber shops, beauty parlours, spas, and also gyms, health clubs and yoga centres.

Because a client receives the service at your salon, almost every salon sale is an intra-state supply. That means you charge CGST and SGST (or CGST and UTGST in a Union Territory), not IGST. IGST mainly comes up on your purchases from suppliers in other states.

What the cut means for a client’s bill

Illustrative example: a client takes a haircut (₹1,000), a facial (₹2,000) and a spa therapy (₹3,000).

The client saves ₹780 on this visit.

What “5% without ITC” means for salon owners

Input tax credit is the GST you pay on your business purchases (products, rent, equipment, software, maintenance) that you could earlier set off against the GST you collected from clients. Under the old 18% regime, a salon paying ₹40,000 GST on purchases in a month could reduce its cash GST payment by that amount.

At 5% without ITC, the GST paid on inputs used for your services becomes a cost, not a credit. You simply pay 5% of your service turnover in cash. For most salons the overall tax burden still falls, because 5% on sales is usually lower than the old net amount (18% on sales minus credits), but your cost per service rises slightly wherever you used to recover GST on products and rent.

Illustrative example: a salon with ₹5 lakh of monthly service sales and ₹30,000 of GST on its purchases paid about ₹90,000 − ₹30,000 = ₹60,000 under the old rules. Now it pays ₹25,000 GST, but the ₹30,000 of input GST is a cost. The total tax-related outflow is about ₹55,000, slightly lower than before, and clients pay less.

Products vs services: different GST rates on one bill

Most salons sell two different things: services (taxed at 5%) and retail products such as shampoo, serums, hair oil or skin care that clients take home. Retail products are goods, so they carry the GST rate of that product’s HSN code, not the 5% service rate.

GST 2.0 also cut the rate on several personal-care goods from 18% to 5% from 22 September 2025, including hair oil, shampoo, toilet soap bars, toothpaste, talcum powder, face powder, shaving cream and aftershave. Many other cosmetic and skin-care products are taxed at different rates, so always check each product’s HSN code and current rate with your supplier invoice or CA.

Who must register for GST: salon turnover thresholds

A salon must take GST registration when its aggregate turnover in a financial year crosses the threshold. Aggregate turnover is the total of all taxable, exempt and export supplies under the same PAN across India, so add all your branches and your retail sales together.

Should a small salon register voluntarily?

It makes sense if corporate clients or hotels need GST invoices from you, or you will cross the threshold soon. The downside: you must charge 5% GST to every client and file returns every period, even in slow months.

How to register a salon for GST: step by step

GST registration is free and fully online on the official GST portal (gst.gov.in). There are no paper forms. Keep scanned copies of the documents below ready before you start.

GST invoice requirements for salons

Every taxable sale needs a tax invoice. Your invoices are the base for your GSTR-1, so getting the format right every time is the single most useful compliance habit. A salon tax invoice should show:

• Salon’s legal name, address and GSTIN
• A unique, consecutive invoice number (up to 16 characters, one series per financial year; a separate series per outlet is fine)
• Date of issue
• Client name and address, and the client’s GSTIN if the client is a registered business (for example a corporate booking)
• Description of each service or product, with its SAC or HSN code
• Quantity (for products), value, discount and taxable value
• Rate and amount of CGST and SGST (or IGST) for each line
• Total invoice value in figures
• Signature or digital signature of the supplier or authorised person (a computer-generated invoice can carry an electronic signature)

SAC codes commonly used by salons

Businesses with aggregate turnover up to ₹5 crore must show at least a 4-digit HSN/SAC on B2B invoices, and above ₹5 crore a 6-digit code on all invoices. Showing the code on every invoice is good practice either way.

Small bills, credit notes and e-invoicing

• Small walk-in bills: a consolidated end-of-day invoice is allowed for B2C sales below ₹200 when the client does not ask for one, but issuing an invoice for every bill is cleaner.
• Refunds and corrections: never edit or delete an issued invoice. Issue a serially numbered credit note (or debit note) linked to the original invoice.
• Composition salons: issue a bill of supply, not a tax invoice, and do not show GST on it.
• E-invoicing: applies to B2B invoices of businesses above the notified turnover limit (currently ₹5 crore). Normal B2C salon bills do not need an IRN.

Composition scheme for salons: does it still make sense?

The composition scheme for service providers lets businesses with turnover up to ₹50 lakh in the previous financial year pay a flat 6% GST (3% CGST + 3% SGST) on turnover, with simpler filing. In the 18% era this was attractive for small salons.

After the September 2025 rate cut, the picture is different:

Because 6% is higher than the regular 5% rate, and you cannot recover it from clients, the composition scheme is rarely the better choice for a salon whose turnover is mainly 5% services. Run the numbers with your CA before opting in or out.

GST returns for salons and their due dates

A registered salon files returns even in a month with no sales (a nil return). The main returns are:

The QRMP scheme (Quarterly Return, Monthly Payment) is open to taxpayers with aggregate turnover up to ₹5 crore and is usually the easiest option for single-outlet and small multi-outlet salons: you file GSTR-1 and GSTR-3B once a quarter but pay tax monthly.

Late fees, interest and time limits

• Late fee: generally ₹50 per day (₹25 CGST + ₹25 SGST) for late GSTR-3B or GSTR-1, lower for nil returns, subject to caps.
• Interest: 18% per year on tax paid late.
• GSTR-3B auto-population: your tax liability in GSTR-3B is increasingly auto-filled from GSTR-1 and locked, so correct mistakes in GSTR-1 (or GSTR-1A) before filing GSTR-3B.
• Three-year limit: the portal no longer accepts returns filed more than three years after their due date, so do not let old periods pile up.
• Non-filing: continued non-filing can lead to cancellation of registration.

Common GST mistakes salons make

GST compliance checklist for salons, spas and gyms

Use this checklist once when you set up and then review it every quarter. It updates our earlier 12-point GST compliance checklist for the current rules.

Set-up

• Aggregate turnover checked across all outlets under your PAN, and registration taken when required
• Every outlet in the same state added as an additional place of business; separate GSTIN for each other state
• Registration certificate displayed and GSTIN shown on the name board at every outlet
• Billing software updated: services at 5% (no ITC), every retail SKU mapped to its HSN and correct rate
• Invoice series set per financial year (and per outlet if needed); credit and debit notes serially numbered
• GSTIN collected from all suppliers, and your GSTIN shared with suppliers and corporate clients

Every day and every month

• A tax invoice issued for every sale, including cash and UPI sales
• Refunds and cancellations handled through credit notes, never by editing bills
• Day-end report matched with cash, card and UPI collections
• Purchases checked against GSTR-2B; ITC claimed only where allowed (for example, on goods bought for resale) and never on inputs used for 5% services
• Tax paid and GSTR-1 and GSTR-3B (or PMT-06 under QRMP) filed on time, including nil returns

Every year and on any change

• Annual return (GSTR-9 or GSTR-4) filed, or confirmed as optional for your turnover
• Composition vs regular scheme reviewed with your CA before the new financial year
• Amendment filed within 15 days if the address, name, partners or outlets change
• Books, invoices and records kept in electronic form for at least 72 months from the due date of that year’s annual return
• On closing a business, registration cancelled properly and tax on remaining stock and assets settled

How salon software makes GST compliance easier

Most GST problems start at the billing counter, so the fix is a billing system that gets rates, invoices and refunds right by default.

Invoay salon software handles GST billing for services, products, packages and memberships across one or many outlets, and gives you day-end and tax reports in a few clicks. If you run several branches, see our guide to software for salon and spa chains.

Frequently asked questions

Related reading: How to start a salon business in India · Salon licences and registrations in India · Salon staff commission and payroll · Salon software in India