GST on Salon and Beauty Parlour Services in India: 5% Without ITC

What is the GST rate on salon and beauty parlour services?

From 22 September 2025, salon, beauty parlour and barber services in India attract 5% GST without input tax credit (ITC). Until 21 September 2025 the same services were taxed at 18% with credit. A haircut, facial, manicure or similar service at a registered salon now carries 5% on the bill.

The 56th GST Council recommended the cut. Its press release of 3 September 2025 lists a reduction from 18% to 5% on beauty and physical well-being services, including services of gyms, salons, barbers and yoga centres, and shows the entry as "Beauty and physical well-being services falling under group 99972", moving from "18% with ITC" to "5% without ITC". The Council FAQs confirm the same rate for health clubs, salons, barbers, fitness centres and yoga. The change was notified through Notification 15/2025-Central Tax (Rate), dated 17 September 2025.

Salon SAC code: these services sit under heading 9997 (other services), Group 99972 (beauty and physical well-being services). Ask your CA to confirm the exact six-digit code within that group for each service on your menu.

Is 5% optional, and can a salon claim input tax credit?

No on both counts. The 5% rate is mandatory, and it applies only if the salon does not take credit of the GST charged on goods and services used to supply the service. CBIC said "the 5% without ITC rate on beauty and physical well-being services is mandatory" and that service providers "do not have the option to charge 18% with ITC", as reported by Business Today.

In practice, GST on these salon inputs stops being recoverable and becomes part of your costs:

• Rent for a shop in a mall or commercial market, where the landlord charges GST
• Styling chairs, wash stations, dryers, steamers and other equipment
• Professional products used during services, such as colour, bleach, wax and facial kits
• Housekeeping, laundry and maintenance contracts
• Software, marketing and professional fees

Credit already in your electronic credit ledger is a separate question. The Council FAQs say credit "once duly availed" can be used to pay output tax under Section 49(4) of the CGST Act, but how that works for your salon depends on your facts. This is the same trade-off gyms face, covered in our guide to GST on gym membership, because both now fall under the same entry.

How should a salon bill walk-in customers?

A registered salon should give every customer a tax invoice with a consecutive serial number, the service description, the taxable value and the GST shown separately. Rule 46 of the CGST Rules sets out what a tax invoice must contain.

• Serial number: consecutive, up to sixteen characters, in one or more series and unique for the financial year.
• Customer details: for an unregistered walk-in customer, name and address are needed only when the bill crosses the value limit in Rule 46; many salons still record a name and phone number for their own records.
• Each line separately: list services and products on their own lines, because they can carry different rates.
• Rate of tax: show CGST and SGST (2.5% each for services within your state).
• Business customers: if a company books services and gives its GSTIN, print the GSTIN on the invoice.
• Cancel, do not delete: keep cancelled bills on record so the series has no unexplained gaps.

Decide whether menu prices include GST and say so clearly on the price list, the shop board and your website. Customers who read that salon GST fell to 5% will ask how it reflects on their bill.

How is GST charged on packages and memberships?

Prepaid packages, bridal bookings and salon memberships attract 5% GST like individual services, and tax is usually due when you receive payment or issue the invoice, whichever is earlier. Section 13 of the CGST Act sets this time of supply for services.

1. Advance received: issue a receipt voucher when a customer pays in advance, for example a bridal booking deposit, and account for the GST on it.
2. Package redeemed over months: keep a record of sessions used against each package so the books match what was billed.
3. Packages that include products: if a package bundles take-home products with services, ask your CA how the bundle should be taxed, since goods can carry a different rate.
4. Packages paid around 22 September 2025: the Council FAQs say the rate on advances follows the time of supply rules in Section 14; confirm with your CA which rate applies to yours.
5. Gift vouchers: confirm their treatment with your CA before selling them.

What GST applies to products sold at the salon counter?

Products sold to customers are goods, taxed at the rate for each product, not at the 5% service rate. Goods rates from 22 September 2025 are in Notification 9/2025-Integrated Tax (Rate); for sales within your state the same total rate is split equally into CGST and SGST.

• 5%: hair oil, shampoo, talcum powder, face powder, toilet soap bars, toothpaste, shaving cream, shaving lotion, aftershave lotion, and combs and hair clips.
• 18%: most make-up and skin-care preparations, manicure and pedicure preparations, hair preparations other than hair oil and shampoo, perfumes, and hair clippers.
• Check the HSN: classification decides the rate, so confirm each product's HSN code with your supplier or CA.
• Credit on goods for resale: the no-ITC condition is tied to inputs used for the service; ask your CA how credit works on stock you buy only to resell.

Worked example: GST on a bill of 100

On a service bill of 100 before tax at a registered salon, GST is 5, so the customer pays 105. Within the same state, that 5 is split into 2.5 CGST and 2.5 SGST. The figures below are units, not rupee amounts.

If your menu price of 100 already includes GST, the taxable value is 100 × 100 ÷ 105, about 95.24, and the GST inside it is about 4.76. Set your software to the right method, inclusive or exclusive, so every bill matches your price list.

Does a small salon without a GSTIN charge GST?

No. A salon that is not registered for GST must not charge GST on its bills. Section 32 of the CGST Act says a person who is not registered "shall not collect" any amount by way of tax.

• Many small parlours and barber shops stay below the turnover limit for registration set in the GST law; the limit differs for some special category states.
• How turnover is counted matters if you run more than one branch, sell products as well, or own other businesses under the same PAN.
• Give a simple numbered receipt that states the salon is not registered for GST, with no tax line.
• If your turnover is growing towards the limit, speak to your CA before you cross it, not after.

How DVM Techno Can Help

We do not file GST; your CA does. What we build is the website your customers check before they book. Our salon and parlour website design service in Gurgaon includes a clear service menu where you choose whether to list prices or quote after consultation, WhatsApp booking buttons, a bridal portfolio, consent records for client photos, and branch pages with a map. Your menu can state plainly whether prices include GST, and staff can update it without a developer when rates change.

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