5% GST cut to make salons, gyms and yoga services cheaper from Sept 22

From haircuts to toothpaste, the GST Council's rate cut could ease monthly household budgets, though experts caution benefits may vary depending on service providers

Indian households are set to see lower bills for personal care and wellness as the Goods and Services Tax (GST) Council has slashed rates from 18 per cent to 5 per cent on services such as salons, gyms and yoga centres. The new rates will apply from September 22. 

 

Daily-use services to get cheaper

 

The GST Council, in its 56th meeting, decided to bring services offered by salons, barbers, gyms, fitness clubs and yoga centres under the concessional 5 per cent slab. The move is aimed at easing monthly household expenses, especially for the lower middle class and poorer sections of society, the finance ministry said in a set of FAQs.

 

The ministry added that the decision was part of a broader rationalisation exercise to simplify tax administration and reduce everyday costs.

 

Personal care products also included

 

Apart from services, a range of daily-use items will also become cheaper. Taxes on the following have been reduced to 5 per cent from 12–18 per cent earlier:

 

·  Hair oil

 

·  Toilet soap bars (but not liquid soaps, which remain at 18 per cent)

 

·  Shampoos

 

·  Toothbrushes, toothpaste and dental floss

 

·  Talcum powder, face powder, shaving cream and aftershave lotion

 

Mouthwash and liquid soaps have been kept out of the concessional list, with GST on these products unchanged.

 

Relief or mixed bag?

 

Tax experts pointed out that while consumers may see lower bills, the absence of input tax credit could dilute the benefit. Rajat Mohan, senior partner at AMRG & Associates, told PTI that service providers face costs such as rent, consumables and infrastructure, which will no longer be creditable. “This could neutralise part of the consumer benefit, as providers may still embed these costs into their pricing structures,” he said.

 

He added that the move is a signal that the government wants to position wellness and personal care as accessible essentials rather than luxuries. However, whether the full benefit reaches consumers depend on whether service providers pass on the lower tax burden.

 

A test for GST reform

 

Mohan also noted that with the anti-profiteering authority no longer in place, ensuring that the rate cuts translate into real savings may be challenging. “This reform is emblematic of a broader ‘reboot mode’ for the GST economy. Yet, whether the intended benefits fully materialise remains uncertain,” he said.