GST on Beauty Parlour and Gym Services: Tax Rates and Impact

The beauty parlours, gyms and fitness or wellness centres operate in huge numbers in India with these services getting popular by the year. GST on beauty parlours and GST on gym apply only where the yearly turnover of the entity (GSTIN) exceeds the threshold prescribed for GST registration. Both these businesses attract GST at 18% as their services fall under the HSN code 99. This article will discuss various implications of GST for these businesses.

GST Rate for Beauty Parlours

Beauty parlours provide services such as haircuts, facials, grooming packages and skincare treatment. All such services are covered under HSN Code 9997 and attract GST at 18%. Beauty parlours whose annual turnover is over the prescribed threshold for GST registration but less than Rs.50 lakhs can opt for the composition scheme and pay only GST at 6%.

GST Rate for Gym Services

Gyms and fitness centres provide periodic memberships to use the gym, personal training or wellness programmes. These services are covered under HSN 999723, and accordingly, 18% GST is charged on such services. These businesses may also opt for the composition scheme if the annual turnover is over the prescribed threshold for GST registration but less than Rs 50 lakhs.

Input Tax Credit (ITC) for Beauty Parlours and Gyms

Beauty parlours and gyms are involved in taxable supply for services, and hence, the businesses, which are registered as regular taxpayers only, can avail input tax credit on raw materials and assets purchased for the purpose of business. 

For instance, beauty parlours can avail GST paid upon purchases of beauty products or cosmetics, furniture, rent and maintenance expenses. Claiming these input tax credits reduces the overall GST liability. 

GST-registered consumers who pay gym membership may not be able to avail themselves of an input tax credit on such an expense, as the same is restricted under Section 17(5)(b).

GST on Beauty Products and Gyms Equipment

Beauty products which are used as an input by beauty parlours fall under HSN Code 3303 and attract GST at 18%. 

Gym equipment, which is an asset to the gyms, falls under HSN Code 9506 and attracts GST at 18%.

These businesses can avail GST charged on the above items, as it is used for business purposes.

Impact of GST on Beauty Parlour and Gym Industry

GST has brought several benefits to the beauty parlour and gym industry. 

These service-based businesses can claim input tax credits on goods purchased for business purposes. This has reduced the tax burden and increased free cash flow for businesses.

GST filing and issuance of compliant invoices have increased the overall cost of operation, but these compliances help these businesses develop trust among the customers and suppliers.