When GST was introduced in India, cosmetics were initially taxed at 28%. Through considerable effort and numerous presentations to the government, we successfully had the rate reduced to 18%. The salon and wellness community are calling the government to rethink its stance, emphasizing that not all beauty and cosmetic services fall into the ‘luxury’ category.
The salon and beauty service industry is facing a looming challenge that could fundamentally change how we operate. The government is reportedly considering a new Goods and Services Tax (GST) hike, pushing cosmetic treatments and high-end beauty services into the highest tax bracket of 28%. This proposed increase would cover services like Botox, dermal fillers, luxury salon treatments, and even tattoo parlors. For us, as industry professionals, this isn’t just a minor adjustment—it’s a potential game-changer with far-reaching consequences.
While the government promotes entrepreneurship and the Make in India initiative, it simultaneously creates significant obstacles by increasing tax rates. The Beauty Services Industry, which has seen a surge in women entrepreneurs, will now face an uprising operational difficulty. This industry isn’t just about beauty; it’s about wellness and health. This tax hike could overshadow the immense benefits it has provided to people’s well-being and quality of life.
What Does This Mean for the Salon Industry?
The ripple effect of this tax hike on our industry would be significant. Luxury beauty services, which have long been the cornerstone of our offerings—ranging from Botox injections and advanced anti-aging treatments to premium spa experiences—are at risk of becoming unaffordable for a large portion of our clientele. This could drastically reduce demand for these services, as many consumers might find them out of reach.
At a time when the beauty and wellness sector has been recovering and growing, this tax hike could deliver a major setback. Salons, spas, and cosmetic clinics that have spent years building a loyal customer base may now face the prospect of dwindling bookings and increased operational costs. For high-end service providers, the sharp rise in tax could force many to either pass these costs onto clients—making treatments even more expensive—or consider downsizing or shutting down altogether.
Luxury Services Under the Spotlight
The proposed tax doesn’t just affect cosmetic treatments like Botox and fillers. Tattoo parlors, which have experienced a surge in popularity in recent years, could also be hit by the 28% GST. Even popular high-end salon services like keratin treatments, hair straightening, and custom hair coloring would face the same elevated tax rate.
Moreover, luxury spas and wellness resorts, which offer services such as cryotherapy, detox programs, and holistic health therapies, would see their costs spike significantly. These indulgent experiences, often seen as the ultimate in self-care, might soon become unaffordable for many consumers, further impacting businesses that cater to clients seeking top-tier wellness services.
The Industry Braces for Impact
As an industry, we’re deeply concerned about the effects of this tax hike. Many salon owners and wellness professionals are already feeling the pressure of rising costs, and this added burden could make it difficult for some businesses to survive. The high-end beauty sector is not just about luxury; it’s about maintaining quality, employing skilled professionals, and providing an experience that clients cherish. But with a 28% tax on top, we fear that even our most loyal clients may begin to cut back on their regular treatments, opting for cheaper alternatives or forgoing services altogether.
Redefining Beauty as a Luxury
One of the biggest shifts this tax hike signals is the reclassification of beauty services as a luxury rather than a routine part of modern life. For many, treatments like Botox or regular facials aren’t just about vanity—they’re about feeling good, maintaining self-confidence, and presenting their best selves. If these services become prohibitively expensive, we might see a shift in how self-care is valued, with fewer people able to justify the high costs of looking and feeling their best.
What’s Next?
While this tax proposal is still under review, the potential implications are already sending ripples throughout the industry. Many in the salon and wellness community are urging the government to reconsider, arguing that not all beauty and cosmetic services should be lumped into the “luxury” category. After all, some treatments serve functional, even medical purposes, and shouldn’t be viewed through the same lens as ultra-premium goods like luxury cars or high-end electronics.
For now, we’re keeping a close eye on developments. But one thing is certain: if this 28% tax goes into effect, it will reshape the beauty landscape for both consumers and professionals alike. We will need to prepare for a future where the cost of self-care could skyrocket, and where our industry’s definition of “luxury” might be dramatically redefined.
Let’s be prepared to urge the government to reconsider this tax hike. Share your thoughts and comments with us to make our collective voice heard.
