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GST on Hair & Beauty Parlour Services in India: A Complete Guide

Starting a hair and beauty parlour business in India is an excellent opportunity, given the increasing demand for personal grooming and wellness services. However, before setting up a salon, it is essential to understand the GST on beauty services and related products.

This guide provides a detailed overview of GST on hair & beauty parlour services, salon products, registration requirements, tax rates, and compliance to help entrepreneurs navigate the tax landscape effectively.

GST Applicability on Hair & Beauty Parlour Services

The beauty and personal care industry falls under the service sector, and most services provided by hair salons, beauty parlours, and spas attract GST. The key aspects of GST applicability on beauty services are:

1. GST Rate on Beauty Parlour Services

All beauty and personal grooming services (haircuts, facials, makeup, skincare treatments, etc.) are subject to 18% GST.
Services provided by luxury salons and high-end spas are also taxed at 18% GST.

2. GST on Haircut and Basic Grooming Services

Regardless of the nature of the service (basic or premium), all hair-cutting, styling, and grooming services attract 18% GST.

3. GST on Massage & Spa Services

Spa and wellness services, including body massages, Ayurvedic therapies, and wellness treatments, are subject to 18% GST.
However, if services are provided under recognized medical systems (like Ayurveda or Naturopathy registered under medical laws), they may be exempt from GST.

4. GST on Bridal Makeup & Special Event Services

Bridal makeup, party makeup, and other premium beauty services attract 18% GST.
If the services are bundled into a package (e.g., pre-bridal packages), the entire package amount will be subject to 18% GST.

GST on Sale of Beauty Products in Salons

Apart from services, many beauty parlours and salons also sell beauty products such as shampoos, conditioners, skincare products, and cosmetics. The GST rates for these products vary:

1. GST on Cosmetics and Skincare Products

Lipsticks, foundations, nail polish, makeup kits – 18% GST
Shampoos, conditioners, hair oils, and perfumes – 18% GST
Skin creams, moisturizers, and sunscreens – 18% GST
Herbal and Ayurvedic beauty products – 12% GST (if classified under medicinal products)

2. GST on Salon Equipment and Furniture

Hair styling tools (dryers, straighteners, curling irons, etc.) – 18% GST
Salon chairs, mirrors, and furniture – 18% GST
LED lights, beauty machines, and massage beds – 18% GST

3. GST on Training & Beauty Courses

If a beauty parlour also offers training courses for hairstyling, makeup, or skincare, such courses are subject to 18% GST, unless the institution is recognized under government-approved educational boards.

GST Registration for Beauty Parlours & Salons

Who Needs to Register for GST?

A beauty parlour or salon must register for GST if:

Annual turnover exceeds ₹20 lakh (₹10 lakh for special category states).
They sell taxable goods (beauty products) along with providing services.
They operate multiple branches in different states.
They deal with B2B clients who require GST invoices for tax benefits.

Documents Required for GST Registration:

Business PAN Card
Aadhaar Card of Proprietor
Business Address Proof
Bank Account Details
Rental Agreement (if applicable)

How to File GST Returns for a Salon?

Registered beauty parlours and salons must file monthly or quarterly GST returns (GSTR-1, GSTR-3B, and GSTR-9) based on their turnover.

Input Tax Credit (ITC) for Beauty Parlours

What is ITC?

Input Tax Credit (ITC) allows beauty parlours and salons to claim credit for GST paid on purchases (such as salon equipment, beauty products, and furniture), reducing their overall tax liability.

Eligible ITC Claims for Salons

Beauty parlours can claim ITC on:

✔ Hair styling tools, salon equipment, and furniture

✔ Beauty products used for business purposes

✔ Rent, electricity, and maintenance costs for the salon

✔ GST paid on advertising and marketing expenses

Blocked ITC (Where ITC Cannot Be Claimed)

Under Section 17(5) of the CGST Act, ITC cannot be claimed on:

Beauty and wellness services for personal use
Capital goods used exclusively for non-business purposes
Motor vehicles (unless used for commercial transport)

Benefits of GST Compliance for Beauty Parlours

✔ Transparency – GST invoicing builds customer trust and enhances business credibility.

✔ Seamless Business Operations – GST registration allows businesses to deal with corporate clients and expand nationwide.

✔ Cost Savings via ITC – Claiming input tax credit helps reduce the overall tax burden.

✔ Avoids Legal Hassles – Proper GST compliance ensures the business avoids penalties and legal troubles.

Conclusion

For anyone planning to start a hair and beauty parlour business, understanding GST on services, products, and compliance requirements is essential. A well-structured GST strategy ensures smooth business operations, cost efficiency, and tax benefits.