GST on Beauty Treatment Services in 2026: The 5% Salon Rate, SAC Codes, ITC Rules and a Worked Salon Bill

GST on salon and beauty services changed sharply on 22 September 2025, and many price lists, billing apps and websites still show the old rate. This guide is for salon, beauty parlour, spa, barber shop and gym owners, freelance make-up artists, and customers who want to check a bill. It explains the 2026 rate on beauty treatment services, what "5% without input tax credit" means in practice, the SAC codes, when a parlour must register, how products sold over the counter are taxed, and a worked ₹ salon bill. Everything was checked against the notified rate schedules in October 2026.

Quick answer

Beauty and physical well-being services are taxed at 5% (no ITC) since 22 September 2025 — haircuts, facials, waxing, manicures, spa and massage, bridal make-up at a salon, gyms and yoga centres. The rate was 18% (with ITC) before GST 2.0. The catch: the salon cannot claim input tax credit on products, equipment, rent or other inputs used for the service, and it cannot opt back into 18%.

• SAC group 99972: 999721 hair, 999722 cosmetic treatment, 999723 fitness, 999729 other

• On a ₹2,000 facial, GST is ₹100 — it was ₹360

• Registration only above ₹20 lakh turnover (₹10 lakh in some states)

• Products sold at the counter keep their own rates: shampoo 5%, make-up 18%

• Credit on retail stock is still allowed

GST rate on beauty and salon services after GST 2.0

The 56th GST Council recommended cutting tax on "beauty and physical well-being services used by common man including services of gyms, salons, barbers, yoga centres" from 18% with input tax credit to 5% without it. Notification 15/2025–Central Tax (Rate) carried this out by substituting serial 35 of Notification 11/2017–Central Tax (Rate), the services rate schedule, with effect from 22 September 2025. Item (i) now reads "Beauty and physical well-being services falling under Group 99972" at 2.5% central tax, with the condition that credit of input tax charged on goods and services used in supplying the service has not been taken. With the matching 2.5% state tax, the total is 5% (no ITC).

The notification also adds an explanation that matters: the rate for these services is mandatory, and they "shall not be levied" at the general rate for other services in the same heading. Some restaurant and transport services under GST let the supplier choose between a low rate without credit and a higher rate with credit. Salons do not get that choice. A premium salon that would have preferred 18% with full credit must still charge 5%.

Other services under heading 9997 — washing, cleaning and dyeing, and miscellaneous services not classified elsewhere — stay at 18% under item (ii). So a laundry attached to a spa, for example, does not get the beauty rate.

Beauty services GST at a glance (2026)

5% (no ITC)

Salons, parlours, spas, gyms

from 22 Sep 2025

18% (with ITC)

Rate before GST 2.0

99972

SAC group

heading 9997

₹20 lakh

Registration threshold

₹10 lakh in some states

18%

Make-up and skin care sold over the counter

Which services get the 5% rate: SAC 99972

The services classification scheme published with the rate notification divides group 99972 into four codes. Whatever a business calls itself — salon, parlour, unisex studio, spa, wellness centre, gym — the test is whether its service falls into one of them.

Make-up artists who provide beauty services in person, at a salon or at the client's home, generally fall within the beauty group and take 5% (no ITC). A make-up artist who also sells or rents bridal jewellery and outfits makes separate supplies of goods or rental services at their own rates, and should bill them on separate lines.

Cosmetic surgery and hair transplants. Health care services by a clinical establishment or doctor are exempt under Notification 12/2017–Central Tax (Rate). But the definition of health care in that notification specifically excludes hair transplant and cosmetic or plastic surgery, except when undertaken to restore or reconstruct anatomy or functions affected by congenital defects, developmental abnormalities, injury or trauma. Purely cosmetic procedures are therefore taxable, and the scheme places cosmetic treatment "including cosmetic or plastic surgery" in SAC 999722, now at 5% (no ITC). Reconstructive surgery after an accident remains exempt.

What is not covered. Treatment of an illness, injury or deformity in a recognised system of medicine, including Ayurveda, by a clinical establishment or an authorised medical practitioner is health care, not beauty, and stays exempt. Washing, cleaning and dyeing and other miscellaneous services in heading 9997 stay at 18%.

What "5% without ITC" means for a salon

Explanation (iv) to Notification 11/2017 defines the "credit not taken" condition in two parts. First, credit on goods or services used exclusively for the beauty service must not be taken at all. Second, credit on goods or services used partly for the beauty service and partly for other taxable supplies must be reversed as if the beauty service were an exempt supply, under section 17(2) of the CGST Act and the reversal rules.

For a typical salon, the exclusive inputs are professional products used on clients — hair colour, developer, facial and waxing kits, bleach, disposable towels — as well as chairs, dryers and steamers, uniforms and in-salon advertising. All the GST on these is now a cost. Common inputs, such as rent, billing software and accountancy, are shared between services and any retail sales, so only the part relating to retail can be kept.

The customer benefits because the tax on the bill falls by 13 percentage points. The salon gives up credit, but for most small salons the trade is favourable. The worked figures below show why.

Illustrative monthly P&L. A two-chair unisex salon in Pune earns ₹3,00,000 a month from services before tax. It spends ₹45,000 on professional products and ₹60,000 on rent to a registered landlord, both with 18% GST.

If the salon keeps its pre-tax prices, its customers pay ₹39,000 less a month and the salon absorbs ₹18,900 of input GST as cost. If the salon instead keeps the customer price at ₹3,54,000, its pre-tax revenue rises and it ends up ahead. The figures are illustrative, not industry averages; check yours with the break-even calculator.

A worked salon bill: services and products together

Salons often sell products over the counter in the same bill as the service. These are two different supplies. The service is taxed at 5% (no ITC); each product is goods taxed at its own rate under Notification 9/2025–Central Tax (Rate).

The customer pays ₹4,461. In a salon in the customer's own state, each GST figure splits half and half into CGST and SGST. Show the SAC code for services and the HSN code for goods; a salon with turnover up to ₹5 crore needs only a 4-digit HSN on B2B invoices, though many billing apps print the full code anyway.

Products used in the service are not sold separately. The hair colour applied during a colouring service is part of the service, not a sale of hair colour, so the whole charge is taxed at 5%. Don't split a colouring service into "product" and "labour" lines to change the tax.

Credit on retail stock is allowed. Shampoos, serums and styling products bought for resale are used to make taxable supplies of goods, not to supply the beauty service, so the GST paid on them can be claimed as credit against the GST on retail sales. Keep separate purchase invoices and stock records for retail and professional products — that is what an officer will ask for.

GST on cosmetics and personal care products

GST 2.0 cut several everyday personal care products to 5% while leaving most cosmetics at 18%. This is the rate a salon charges when it sells the product, and the rate it pays when buying for retail.

GST on cosmetics and personal care products (2026)

Product (HSN)	GST rate	Schedule
Hair oil, shampoo (3305)	5%	Sch. I
Talcum powder, face powder (3304)	5%	Sch. I
Toothpaste, tooth powder (3306)	5%	Sch. I
Shaving cream, shaving lotion, aftershave (3307)	5%	Sch. I
Toilet soap in bars or cakes (3401)	5%	Sch. I
Make-up, skin creams, serums, sunscreen, nail polish (3304)	18%	Sch. II 61
Hair colour, conditioner, gels and other hair preparations (3305)	18%	Sch. II 62
Perfumes and toilet waters (3303)	18%	Sch. II 60
Deodorants, bath preparations, depilatories (3307)	18%	Sch. II 64
Face wash and liquid body wash (3401)	18%	Sch. II 66

Hair oil, shampoo (3305)

GST rate

5%

Schedule

Sch. I

Talcum powder, face powder (3304)

GST rate

5%

Schedule

Sch. I

Toothpaste, tooth powder (3306)

GST rate

5%

Schedule

Sch. I

Shaving cream, shaving lotion, aftershave (3307)

GST rate

5%

Schedule

Sch. I

Toilet soap in bars or cakes (3401)

GST rate

5%

Schedule

Sch. I

Make-up, skin creams, serums, sunscreen, nail polish (3304)

GST rate

18%

Schedule

Sch. II 61

Hair colour, conditioner, gels and other hair preparations (3305)

GST rate

18%

Schedule

Sch. II 62

Perfumes and toilet waters (3303)

GST rate

18%

Schedule

Sch. II 60

Deodorants, bath preparations, depilatories (3307)

GST rate

18%

Schedule

Sch. II 64

Face wash and liquid body wash (3401)

GST rate

18%

Schedule

Sch. II 66

Note the split within headings. A bottle of shampoo is 5%, but a conditioner or hair colour from the same brand is 18%, because only hair oil, shampoo and mehendi paste in cones are carved out of the 18% hair-preparations entry. Similarly, talcum and face powder are 5% while other make-up and skin-care products in heading 3304 stay at 18%. Our guide to GST 2.0 covers the wider rate changes.

Registration, composition and small parlours

Threshold. A salon or parlour that only supplies services within its state must register when aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in the special-category states that use the lower limit under section 22. Aggregate turnover counts everything — services, retail product sales and any exempt supplies — across all branches under the same PAN in India. A neighbourhood parlour taking ₹1,20,000 a month in services and ₹20,000 in product sales has ₹16.8 lakh a year and does not need to register. Once it adds a second branch, it may cross the limit. See GST registration for the process.

Unregistered parlours charge no GST and must not show GST on their bills. Collecting GST without a GSTIN is not allowed, and the customer gets nothing for it.

Composition is no longer attractive. Service providers with turnover up to ₹50 lakh can choose the composition scheme under section 10(2A), paying 6% of turnover. Before GST 2.0, that was cheaper than 18%. Now the regular rate is 5% (no ITC), can be collected from customers, and is lower than 6% that a composition dealer has to pay out of its own pocket. A salon on composition should consider opting out at the start of the next financial year.

Packages, memberships and invoicing

Many salons and gyms sell bridal packages, ten-session facial packs and annual memberships paid in advance. Under section 13 of the CGST Act, the time of supply for a service is the earlier of the invoice date and the date of payment, provided the invoice is issued on time. A customer who pays ₹12,000 in October for a package used over the next six months has paid for a service in October, and the salon owes 5% (no ITC) on it in that month's return — ₹571 of tax inside a ₹12,000 tax-inclusive price, or ₹600 on top of a ₹12,000 pre-tax price. Gyms selling yearly memberships are in the same position.

The rate change raised a question for packages paid before 22 September 2025 but used afterwards. Section 14 of the CGST Act deals with this: for a service supplied after the change, where both the invoice and the payment came before it, the old rate applied; where the invoice was issued after the change, the new rate applied. Salons with long-running memberships sold around that date should keep the invoice and receipt dates on file in case the rate is questioned.

On invoicing, a registered salon must issue a tax invoice showing its GSTIN, the SAC, the taxable value and the CGST and SGST amounts. Rule 46 of the CGST Rules lets a supplier skip an individual invoice for sales below ₹200 to an unregistered customer who doesn't ask for one, provided it issues one consolidated invoice for all such sales at the end of each day — useful for barber shops with many small walk-in bills. Customers who ask for a GST bill for a business should be told that the GST on beauty services can't be claimed as credit, which avoids disputes later.

Rent, franchise fees and reverse charge

Three costs catch salons out now that credit is gone.

Rent from an unregistered landlord. Since 10 October 2024, a registered business renting commercial premises from an unregistered landlord pays 18% GST on the rent under reverse charge. Before GST 2.0 a salon paid this and claimed it back as credit. Now the reverse-charge tax still has to be paid in cash, but the credit relates to the beauty service and can't be taken, so it is a straight 18% addition to rent. See GST on rent.

Franchise and brand fees. Franchise salons pay royalties and marketing fees to the brand, usually with 18% GST. That GST is now a cost for the franchisee, which changes the economics of franchise agreements written before September 2025.

Equipment and fit-out. GST on chairs, spa beds, laser machines and interior work for a new salon cannot be claimed. Budget for the full tax-inclusive price when planning a setup, as our beauty parlour business plan does.

Common mistakes with GST on beauty services

Still charging 18%. Billing apps and printed rate cards that were never updated continue to add 18%. Over-collected GST must still be paid to the government, and customers notice.

Taking ITC on professional products. Some salons continue to claim credit on everything they buy. That breaks the condition for the 5% rate. An officer can require the wrongly claimed credit to be reversed with interest and question whether the 5% rate was available at all.

Mixing retail and professional stock. Without separate records, a salon can't show which purchases were for resale and risks losing the credit it is entitled to.

Billing a corporate client and promising ITC. Section 17(5)(b)(i) of the CGST Act blocks credit on beauty treatment for the buyer, so a company booking a wellness package for staff cannot claim the GST. Say so up front to avoid disputes.

Using a non-beauty SAC. A gym that bills as "sports coaching" or a spa that bills as "health care" to change the rate invites scrutiny. Use the 99972 codes.

Salon GST checklist for 2026

0/7

• Billing software set to 5% (no ITC) on all 99972 services
• No ITC claimed on professional products, equipment, rent or franchise fees for services
• Separate purchase records for retail stock, with credit claimed only on those
• Products sold to customers billed at their own rate — shampoo 5%, make-up 18%
• Common credits reversed as if the beauty service were exempt
• Reverse-charge GST on rent from an unregistered landlord paid in cash
• Composition registration reviewed — likely to cost more than 5%

Share Print

The 57th GST Council met in early October 2026; nothing changing the beauty-services rate had been notified when this page was checked.

Official links

• Notification 15/2025–CT(Rate)S.No. 35(i): beauty and physical well-being at 5% without ITC
• Notification 11/2017–CT(Rate)Services rate schedule; Explanation (iv) on 'ITC not taken'
• Services classification (SAC) annexureGroup 99972 codes
• Notification 9/2025–CT(Rate) — goods ratesCosmetics and personal care products
• 56th GST Council — recommendations18% with ITC to 5% without ITC
• GST portalRegistration and returns

What to do next

If you run a salon, parlour, spa or gym, update your rate card and billing software to 5% (no ITC), stop claiming credit on anything used for services, and separate your retail stock. Recalculate your prices with the GST calculator and create compliant bills with the invoice generator. If you are planning a new salon, our beauty parlour business plan works through setup costs and break-even with the new rate.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is the GST rate on beauty parlour and salon services in 2026?

Beauty and physical well-being services under SAC group 99972 — salons, beauty parlours, barbers, spas, massage, gyms and yoga centres — are taxed at 5% (no ITC) since 22 September 2025, down from 18% (with ITC). The condition is that the salon does not take input tax credit on goods and services used to provide the service. The 5% rate is mandatory; a salon cannot choose 18% to keep its credit.

What is the SAC code for beauty parlour services?

Beauty services fall under heading 9997, group 99972. Hairdressing and barber services are SAC 999721; cosmetic treatment, manicure and pedicure 999722; physical well-being services including health clubs and fitness centres 999723; and other beauty treatment services not elsewhere classified 999729. All four codes are taxed at 5% (no ITC).

Does a beauty parlour need GST registration?

Only once its aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh in the special-category states with the lower limit. Aggregate turnover includes retail product sales, so a parlour selling shampoos and creams counts those too. A parlour below the threshold charges no GST and does not need to register.

Can a salon claim ITC on products and rent after GST 2.0?

Not for the beauty service. The 5% rate applies only if credit on goods and services used to supply the service is not taken, so GST on hair colour, facial kits, equipment, rent and franchise fees becomes a cost. A salon can still claim credit on products bought for resale over the counter, because those are separate taxable sales of goods.

Is there GST on cosmetic surgery and hair transplant?

Generally yes. The health care exemption for clinical establishments specifically excludes hair transplant and cosmetic or plastic surgery, unless the surgery restores or reconstructs anatomy or functions affected by congenital defects, developmental abnormalities, injury or trauma. Cosmetic treatment falls in SAC 999722 within the beauty group, now taxed at 5% (no ITC). Reconstructive surgery remains exempt health care.

Can a company claim ITC on spa or salon services for employees?

No. Section 17(5)(b)(i) of the CGST Act blocks input tax credit on beauty treatment, health services and cosmetic and plastic surgery, unless the buyer uses them to make an outward supply of the same category. Because the salon itself charges 5% without credit, the GST on a corporate wellness package is a cost for both sides.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Notification No. 15/2025–Central Tax (Rate), 17 September 2025 (Gazette of India) — Ministry of Finance / Gazette of India · accessed 9 October 2026
2. 2.Notification No. 11/2017–Central Tax (Rate), Explanation (iv) — CBIC · accessed 9 October 2026
3. 3.Scheme of classification of services (Annexure to Notification 11/2017–CT(Rate)) — CBIC · accessed 9 October 2026
4. 4.Recommendations of the 56th GST Council meeting (press release) — GST Council / PIB · accessed 9 October 2026
5. 5.Notification No. 9/2025–Central Tax (Rate) (goods rate schedule) — Ministry of Finance / Gazette of India · accessed 9 October 2026
6. 6.Notification No. 12/2017–Central Tax (Rate), para 2(zg) (health care services) — CBIC · accessed 9 October 2026
7. 7.Section 17 – CGST Act, 2017 (apportionment and blocked credits) — CBIC · accessed 9 October 2026
8. 8.Section 22 – CGST Act, 2017 (persons liable for registration) — CBIC · accessed 9 October 2026
9. 9.Rule 46 – CGST Rules, 2017 (tax invoice) — CBIC · accessed 9 October 2026