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Big Relief For Customers As GST On Beauty, Fitness And Wellness Services Falls From Sep 22

According to the CBIC, a 5 per cent Goods and Services Tax (GST) without input tax credit (ITC) will now apply to beauty and fitness services including salons, spas, gyms and yoga classes.

Consumers heading to salons, gyms or yoga studios later this month can expect lighter bills, after the Central Board of Indirect Taxes and Customs (CBIC) issued a clarification on the applicable GST rates for wellness and personal care services. The new rate structure will take effect from September 22.

According to the CBIC notification, a 5 per cent Goods and Services Tax (GST) without input tax credit (ITC) will now apply to beauty and fitness services including salons, spas, gyms and yoga classes. The earlier practice of charging 18 per cent GST with ITC will no longer be permitted, reported Business Today.

“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 stated in its clarification.

This shift represents a significant reduction for consumers. A service that previously attracted 18 per cent GST will now draw only 5 per cent, directly lowering the final amount payable.

Impact on Consumers and Businesses

The move is expected to provide immediate relief to customers and stimulate demand, particularly as the festive season approaches. Analysts believe that lower tax rates could encourage higher spending on discretionary services such as hair treatments, spa sessions and fitness programmes.

Industry experts, however, caution that service providers will face fresh challenges. Under the revised regime, businesses lose the option to claim credits for taxes paid on inputs such as rent, products and equipment. This may increase operating costs and push companies to reconsider their pricing strategies.

Sector Outlook

Despite the concerns, the immediate benefit is seen to lie with consumers. Analysts suggest that a lighter tax burden could drive more footfall across personal care and wellness outlets. For operators, the task will be to maintain competitiveness while absorbing the impact of higher input costs.

The change, seen as a consumer-friendly step, highlights the government’s push to make wellness and fitness services more accessible. As the new GST regime takes effect from September 22, customers can look forward to more affordable visits to salons, gyms and yoga studios, even as businesses recalibrate to adapt to the new framework.

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