The GST Council has approved a major reduction in taxes on beauty and wellness services such as those offered by salons, gyms, barbers, fitness centres, and yoga studios. Starting September 22, the Goods and Services Tax (GST) on these services will drop from 18% (with Input Tax Credit) to 5% (without ITC).This makes personal care and fitness more accessible for everyday consumers.
What People Can Expect to Save
The rate change extends beyond services to a range of daily-use personal care items, now also taxed at just 5% (down from 12–18%). These include:
*Hair oil, shampoos
*Toilet soap bars (while liquid soaps remain at 18%)
*Toothpaste, toothbrushes, dental floss
*Talcum and face powder, shaving cream, and aftershave lotion
The finance ministry emphasized that the goal of this tax rationalisation is to ease monthly expenses, particularly for the lower-middle and economically vulnerable segments.
What This Could Mean in Practice
Consumers: Expect lighter bills for grooming and wellness routines—whether for a haircut, workout session, or self-care product basket.
Service Providers: Without the benefit of input tax credit, businesses such as salons or gyms may still have to absorb taxed-on rents, supplies, or utilities in pricing. Some experts warn this might limit the consumer-side savings.
Bigger Picture: GST Overhaul Ahead of the Festive Season
This move is part of a broader structural reform under the “Next-Gen GST” framework. The system is being streamlined into two tax slabs—5% and 18%—in place of the current four-tier structure. The revisions aim to drive affordability on essentials, simplify compliance, and boost economic activity.
Alongside wellness services, the 5% slab now covers goods such as soaps, toothpaste, hair oil, dairy products, and even certain appliances. At the same time, high-end goods and sin products carry steep 40% GST.
This tax restructure comes at an opportune moment, with the festive season approaching. If you’d like, I can also break down how this compares to other GST reforms, forecast impacts on consumer spending or industry profitability, or suggest how businesses can adapt to pass on savings effectively.
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