GST on salon services: what owners need to know

Since September 2025, many owners have been asking the same questions. Is it 5% or 18% now? Do I still claim GST on my products and rent? What changes on the bill? The short version is good news for clients and a mixed picture for salons. This guide explains the change in plain words and links to the official sources.

This is general information, checked against official sources on the date of publishing. GST rules change and every salon's situation is different. Confirm your own registration, rate and bills with a chartered accountant (CA).

What is the GST rate on salon services now?

GST on salon services is 5% without input tax credit, from 22 September 2025. The GST Council recommended reducing GST from 18% to 5% on beauty and physical well-being services, including gyms, salons, barbers and yoga centres, and the change took effect on 22 September 2025.

The official FAQ published by the GST Council (question 72) says these services "will attract GST rate of 5% without ITC". The FAQ gives no option to stay at 18% with credit, and CBIC has said the 5% rate is mandatory for these services, as reported by Business Today.

What "without input tax credit" means for you

Without input tax credit, you can no longer reduce the GST you pay by the GST on your own purchases for these services. Before the change, GST paid on salon products, equipment, rent and similar expenses could often be set off against the 18% you collected. Now you collect 5% from clients and pay it over in full.

So the GST on your purchases becomes part of your cost. When you look at your service prices for the year, count that in. Our guide to running a salon business covers costs in more detail.

Some things are not fully clear for every salon, and you should ask your CA about them:

• If you also sell products over the counter, how to split credit on common costs like rent between retail and services.
• What to do with any credit left in your GST ledger from before 22 September 2025.
• Skin clinics: treatments by a doctor may be treated differently from beauty services, and cosmetic procedures can sit in between.
• Spas inside hotels or bundled packages that mix services with stay or food.

Do you need to register for GST?

You must register once your aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in some special category states, according to the CBIC FAQ on GST. Aggregate turnover means all your sales across India under the same PAN, including product sales, not just services.

Below the limit, registration is optional. Some salons register anyway, for example to work with corporate clients who want a GST bill. Ask your CA whether that makes sense for you.

GST registration is separate from your Shop and Establishment registration and trade licence, which come from your state or local body.

What goes on a GST bill

If you are registered, your tax invoice must carry the details listed in Rule 46 of the CGST Rules. For a typical salon bill to a walk-in client, that means:

• Your salon's name, address and GSTIN.
• A bill number in a continuous series, and the date.
• The client's name and address only if they ask for it on a bill under ₹50,000.
• The service code (SAC) and a description of each service.
• The value of each service after any discount.
• The GST rate and amount, shown as CGST and SGST.
• The place of supply with the state's name, if the supply is to another state.
• Your signature or digital signature.

Beauty and physical well-being services fall in service group 99972. Your CA can tell you the exact code for each service on your menu.

A worked bill

Here is an illustrative bill with round numbers. Say a client has a hair spa priced at ₹1,000 before GST, at a registered salon.

If your menu shows prices including GST, work backwards instead. A ₹1,000 price including 5% GST has a service value of ₹952.38 and GST of ₹47.62, split equally as CGST and SGST. Tell clients clearly which way your menu works, so the bill is never a surprise at the counter.

Products sold over the counter are goods, not services, so they carry the GST rate for that product, which can differ from 5%. Ask your CA or supplier for the right rate for each product you sell.

What to do this month

1. Check that your billing software or bill book shows 5% for services, split into CGST and SGST.
2. Decide whether your menu prices include or exclude GST, and say so on the menu.
3. Review service prices with the GST on your purchases now counted as a cost.
4. Keep commission calculations before GST. See our guide to salon staff commission.
5. Book a short call with your CA about input credit, retail sales and the old ledger balance.

Keeping your bookings in one place

Zespa does not replace your CA or your billing. What it does is keep every booking, walk-ins included, in one stylist calendar with Salon OS, so you are not rebuilding the month from a register and WhatsApp chats when you sit down with your accounts. It is free for 6 months for the first 50 salons. See how it works on our partner page.