GST rate cut: Salon visits, gyms, yoga classes to get cheaper from Sept 22, says CBIC 

Planning a salon visit, a gym workout, or a yoga class after September 22? Your bill is set to change, following a clarification issued by the Central Board of Indirect Taxes and Customs (CBIC) on the applicable GST rates for beauty and wellness services.

According to the new CBIC directive, a 5% Goods and Services Tax (GST) without input tax credit (ITC) will now be levied on services such as salons, gyms, spas, and yoga sessions. The earlier practice of charging 18% GST with ITC will no longer be permitted.

“The 5% without ITC rate on beauty and physical well-being services is mandatory. Service providers do not have the option to charge 18% with ITC on these services,” the CBIC clarified in its statement.

This change is likely to provide immediate relief to consumers, as most of these services previously fell under the higher tax slab. For example, a salon service that earlier attracted 18% GST will now be charged at just 5%, lowering the final bill amount. However, the trade-off is that service providers will lose the ability to claim credit for taxes they pay on inputs such as rent, products, or equipment purchases.

Industry experts believe the move could give a boost to consumer spending, particularly with the festive season around the corner. Lower rates might encourage more people to book personal care and fitness services, potentially increasing footfall for businesses in the sector.

On the flip side, operators may need to revisit their pricing strategies. Without ITC, the overall cost of running a salon, gym, or wellness center could rise, forcing businesses to balance affordability for customers with profitability.

Despite these concerns, analysts say the lower GST slab is expected to benefit end-users in the short term. With reduced tax outgo, consumers may feel more inclined to spend on discretionary services like beauty treatments, spa therapies, and fitness programs.

Deepak Gupta, Co-Founder, Style Lounge, said: "The GST rationalisation is a win-win for the beauty industry. For consumers, salon visits instantly become more affordable—self-care no longer feels like a luxury, but an accessible routine. For salons, while the absence of input tax credit means some costs still stay on our shoulders, the reduced tax rate is expected to bring in higher footfall and repeat customers. This dual benefit—greater accessibility for clients and stronger business flow for salons—can help the beauty and wellness sector expand more inclusively across India.”

In short, while businesses may face adjustments, the change signals good news for consumers who can now enjoy personal care and wellness services at a lighter tax burden.