How the New GST Changes Impact the Wellness & Beauty Sector in India

— A Guide for Sustainable Salons & Eco-Friendly Service Providers

The Indian government has introduced a new set of GST rate changes valid from 22 September 2025, and it’s big news for anyone in the wellness & beauty services industry. But if you’re a business focused on sustainability and zero-waste grooming products—what do these GST changes really mean for you?

In this blog, we’ll break it down.

What Has Changed in GST for Beauty & Wellness Services?
• The GST rate for most beauty and wellness services has been reduced to 5% (from 12% or 18%).
• However, this reduction applies without Input Tax Credit (ITC) — so businesses CANNOT claim credit on GST paid for products or materials they purchase.

Why This Matters for Eco-Friendly Salons & Wellness Brands

Most sustainable service providers already have higher operational costs due to eco-friendly inputs like refillable bottles, organic creams, or reusable cloth wipes. Let’s see how the new 5% rate plays out:

Lower GST = More Affordable for Clients

Your services automatically look more budget-friendly. As a green brand trying to appeal to the eco-conscious and price-sensitive audience, a 5% GST service tax helps break barriers.

No ITC = Higher Operational Cost

Since there’s no ITC on inputs, the GST you pay on items like metal razors, coconut oil, or laser hair equipment must be absorbed. This could strain margins.

The Winning Edge: Communicate the Value

Offset your costs by highlighting why your services are premium—zero chemicals, cruelty-free practices, or waste-free alternatives. Plus, you can add: “Now at just 5% GST!” as a marketing hook.

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Case Example: A Salon Using Sustainable Products

A grooming studio using cloth wipes, refillable shampoo bottles, and bamboo scissors will now:
• Pay only 5% GST on the billable service (e.g., haircut or massage)
• Pay 18% GST (or applicable rate) on eco-friendly supplies with no ITC relief

Tip: Bundle products + services to balance costs and boost value for clients (e.g., “Facial + free organic facewipe pack”).

Implementation Checklist for Sustainable Wellness Providers

To adapt smoothly to the 2025 GST structure:
• Revise your service pricing with updated tax calculation
• Update your billing software with the new GST slabs
• Use GST reduction in your new promos (“Now at 5% tax!”)
• Bundle item + service combos (e.g., spa + take-home eco-kit)
• Educate customers: explain what they’re saving with 5% GST, and why your brand is worth it even without ITC

Final Thoughts

The revised GST slab is a big opportunity for eco-friendly salons, organic spas, and low-waste beauty studios. While the lack of ITC poses business challenges, it also opens up a pathway to democratize sustainable grooming with more accessible pricing.

With smart pricing, clever messaging, and your signature eco-twist, your business can thrive in this new GST era.