GST Cut 2025: Salon & Wellness Services Now at 5%
The world of beauty and wellness in India just received a refreshing makeover—not in terms of styles or trends, but in taxation! The GST Council has announced a major reduction in Goods & Services Tax (GST) for salons, gyms, yoga centres, spas, and wellness services.
From 22nd September 2025, these services will now attract 5% GST without Input Tax Credit (ITC) instead of the earlier 18% with ITC. This is not just an economic adjustment—it’s a change that directly touches your lifestyle, your monthly budget, and the way salon and wellness businesses operate.
Let’s dive deep into what this means for customers, salon owners, and the overall industry.
What Exactly Has Changed in GST Rates?
Here’s a simplified breakdown of the changes:
| Services / Products | Earlier GST Rate | New GST Rate | Impact |
|---|---|---|---|
| Salon, barber, spa, gym, yoga & wellness services | 18% (with ITC) | 5% (without ITC) | Directly cheaper for customers, but businesses lose ITC benefit |
| Hair oil, face powder, talcum powder, shaving cream, soaps (bars), shampoos, toothpaste, toothbrush, dental floss | 12–18% | 5% | Household grooming essentials much cheaper |
| Liquid soap & mouthwash | 18% | 18% | No change for now |
This move is part of the government’s GST slab rationalisation strategy, aimed at simplifying tax structures, reducing customer costs, and boosting consumption in high-demand categories like beauty and wellness.
Business Impact: Opportunity in Disguise
While service providers lose out on ITC benefits, the lower GST rate gives businesses an opportunity to attract more customers.
- Higher Footfall Expected: With reduced GST, services become more affordable, encouraging customers to book more frequently.
- Competitive Advantage for Organized Salons: Branded salon chains and beauty clinics can highlight the “GST savings” in their promotions to attract new customers.
- Boost to Small & Medium Salons: Smaller neighbourhood salons that often struggled with pricing pressure can now offer competitive rates.
- Seasonal Growth: With festivals like Navratri, Diwali, and wedding season around the corner, the timing is perfect for salons to maximise bookings.
Example: Real Cost Savings
Imagine a customer taking the following services:
Earlier 18% GST vs Now 5% GST
| Service / Item | Earlier (18%) | Now (5%) |
|---|---|---|
| Haircut | ₹1,000 | ₹1,000 |
| Facial | ₹2,000 | ₹2,000 |
| Spa therapy | ₹3,000 | ₹3,000 |
| Subtotal | ₹6,000 | ₹6,000 |
| GST | ₹1,080 (18%) | ₹300 (5%) |
| Total Payable | ₹7,080 | ₹6,300 |
All prices in INR. Example for illustration.
Multiply this across thousands of customers each month, and you can see why salons will likely see a surge in bookings.
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Broader Industry Impact
The Indian beauty and wellness industry is already one of the fastest-growing, expected to touch USD 30 billion by 2030. With reduced GST, we may see:
- Increased Spending per Visit: Customers might add an extra service (like manicure/pedicure) because their bills feel lighter.
- Expansion of Salon Chains: National brands can expand into Tier 2 & Tier 3 cities where affordability is key.
- Growth of Ancillary Businesses: Product sales (shampoos, oils, creams) will also rise with lower GST on essentials.
- Formalisation of the Sector: More unorganised salons may move into the GST regime as customer demand shifts towards transparency and compliant businesses.
Lifestyle & Wellness Angle
Beyond numbers, this GST cut also carries a subtle but important message: wellness is not a luxury, it’s a necessity.
In today’s fast-paced world, customers are actively investing in their physical and mental well-being. Lower taxation means more people can afford yoga memberships, gym packages, and salon treatments—ultimately improving community health and confidence.
Effective Date: When Will This Apply?
The new GST rates officially come into force from 22nd September 2025.
This means the upcoming festive season—Navratri, Karva Chauth, Diwali, and the wedding rush—will all be celebrated with affordable salon and wellness services.
For businesses, this is the best time to launch special festive offers, membership packs, and loyalty programs to capture the growing demand.
FAQs on GST Cut for Salon & Wellness Services
1. Does this mean all salon services are cheaper?
Yes, all salon and grooming services that were earlier taxed at 18% will now be taxed at 5%.
2. Will salons still get Input Tax Credit (ITC)?
No, ITC benefit will not be available at the new 5% slab.
3. What about salon products like shampoo or toothpaste?
Most daily grooming essentials are now at 5% GST, except liquid soaps and mouthwash which remain at 18%.
4. Will customers see an immediate price drop?
Yes, from 22nd September 2025, service bills will show reduced GST. However, the actual pricing may vary depending on how salons choose to structure their packages.
5. How should salon owners prepare?
Update billing systems, train staff, and communicate clearly with customers about the new rates to build trust.
How Invoay Helps Salons Stay GST-Ready
At Invoay Software, we understand that regulatory changes like GST can create confusion for salon owners. Our Salon POS & CRM software ensures:
- Automatic GST updates as per government changes.
- Professional GST-compliant invoices.
- Seamless handling of both products and services.
- Insightful reports to track the impact of GST on sales and profitability.
- Integration with WhatsApp Business API for customer engagement.
With Invoay, salon and spa owners don’t need to worry about complex tax updates—our system keeps you compliant and future-ready.
👉 Explore Invoay Salon Software →
Final Word
The GST reduction from 18% to 5% is not just a policy change—it’s a lifestyle enabler. Customers save more, businesses grow faster, and the beauty & wellness industry becomes more inclusive.
Whether you are planning a fresh haircut, a relaxing spa day, or joining a yoga class, this is the perfect time to indulge without stretching your budget.
And for salon owners, the opportunity is golden: more bookings, higher loyalty, and the chance to scale your business with the right tools like Invoay’s all-in-one Salon POS software.
✨ Self-care has never been this affordable—or this smart! ✨
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