Salon and beauty parlour services are taxed at 5% GST without ITC — haircut, facial, waxing, threading, manicure, pedicure, bridal makeup and spa. This is down from the earlier 18%; the GST 2.0 reform cut beauty & well-being services to 5% (no ITC) from 22 September 2025. Retail products a salon sells (shampoo, cosmetics) are goods, taxed at their own rate — mostly 18%.
GST Rate for Salon & Beauty Services — Decision Table
Every common salon, spa and beauty-parlour service falls under the personal-care SAC group 9997 (999721 hairdressing/barbers, 999722 cosmetic/manicure/pedicure, 999729 other beauty). All now attract 5% without Input Tax Credit.
| Service / Item | SAC / HSN | GST Rate | ITC |
|---|---|---|---|
| Haircut, styling, blow-dry | 999721 | 5% | No |
| Facial, cleanup, skin treatment | 999722 | 5% | No |
| Waxing & threading | 999729 | 5% | No |
| Manicure & pedicure | 999722 | 5% | No |
| Bridal makeup package | 999729 | 5% | No |
| Spa & body massage (well-being) | 999723 | 5% | No |
| Salon products sold (shampoo, cosmetics) | Goods HSN | 18% | Yes |
| Composition-scheme salon (services) | — | 6% | No |
| Turnover below ₹20 lakh | — | Nil | — |
Rates reflect the GST 2.0 two-slab structure effective 22 September 2025. Confirm on the official GST portal before invoicing.
Salon GST: 18% Then, 5% Now
For years salon and beauty services carried 18% GST with full ITC. The 56th GST Council moved beauty & physical well-being services (salons, barbers, gyms, yoga, spas) to a mandatory 5% without ITC. Providers cannot choose to stay at 18%.
Until 21 Sep 2025 — with ITC
- All salon & beauty services at 18%
- Full Input Tax Credit on rent, products, equipment
- Higher tax on every customer bill
- SAC 9993 personal-care classification
From 22 Sep 2025 — without ITC
- Cheaper bills for customers
- No ITC — input GST becomes a cost
- Mandatory rate — 18%-with-ITC option removed
- SAC 999721 / 999722 / 999729
Because the 5% rate carries no Input Tax Credit, GST you pay on rent, salon equipment, furniture and consumables can no longer be set off — it becomes an embedded cost you must price into your services. The only ITC left is on goods you resell (see below).
Unsure how the 5% cut affects your salon pricing and ITC?
Get My GST Position →GST on Salon Retail Products
When a salon sells a product over the counter — shampoo, hair colour, skincare, cosmetics — that is a supply of goods, not a personal-care service. Goods follow their own HSN rate (most cosmetics and hair-care are 18%), and ITC on those purchases is available because you are reselling them.
- Service billed at 5% (no ITC): the treatment/labour you perform on the client.
- Product billed at its HSN rate (mostly 18%, ITC available): a bottle handed to the client to take home.
- Bundle a product with a service? Apportion the invoice — 5% on the service line, 18% on the product line — rather than blending them.
How GST Adds Up — A Salon Bill
5% Facial + haircut (service)
18% Shampoo sold as product
Under the old rule the ₹2,000 service would have cost ₹2,360 (18%); at 5% the same service is ₹2,100 — a ₹260 saving passed to the customer, offset by the loss of ITC on the salon's inputs.
Selling both services and retail products? Get your invoicing and rates set up correctly.
Get Salon GST Advice →ITC for Salon Owners — What You Can Still Claim
With services at 5% without ITC, credit on service inputs is gone. ITC survives only where you resell goods. Here is the split:
| Input / Purchase | ITC? | Reason |
|---|---|---|
| GST on rent, electricity, salon equipment | No | Used for 5% no-ITC services |
| GST on consumables (wax, colour) used in service | No | Input to a no-ITC service |
| GST on products bought for resale to clients | Yes | Reselling taxable goods at 18% |
| Food & beverages served to clients | No | Blocked under Section 17(5) |
| Owner's personal purchases | No | Not for business use |
A salon that both provides services and resells products keeps ITC only on the resale-goods side; apportion and reverse credit attributable to the 5% services.
The 5% cut lowers the tax on every service bill, but by removing ITC it can raise your net input cost. Salons with heavy rent and equipment GST should re-check their pricing — the headline rate fell, yet unrecoverable input GST may partly eat the benefit.
GST Registration for Salons & Beauty Parlours
A salon supplies a service, so GST registration is mandatory once aggregate turnover crosses ₹20 lakh a year (₹10 lakh for special-category states). Below that you may stay unregistered and charge no GST.
Composition scheme — consider it if
- Turnover is under ₹50 lakh and mostly local walk-ins
- You want simpler quarterly compliance
- You do not resell many products / need ITC
Stay on regular 5% if
- You resell products and want ITC on that stock
- You make inter-state supplies or sell online
- You issue tax invoices clients need for their own credit
A salon under the composition scheme for services pays a flat 6% (3% CGST + 3% SGST) on turnover up to ₹50 lakh from its own pocket, cannot charge GST on the bill and cannot claim ITC.
- GST registration (GSTIN)
- Correct 5% service classification
- Separate product (goods) billing at HSN rate
- Tax invoice / bill of supply
- GSTR-1 (outward supplies)
- GSTR-3B (monthly/quarterly)
- ITC reversal on service inputs
- Composition CMP-08 / GSTR-4 (if opted)
Frequently Asked Questions
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