GST for salons, gyms and yoga: 5% without credit
Updated 07-11-2026
From 22 September 2025, beauty and physical well-being services — salons, barbers, spas, health clubs, gyms, fitness centres and yoga — are taxed at 5% without input tax credit. The rate is compulsory: there is no option to stay at 18% with credit.
What changed
| Until 21 September 2025 | From 22 September 2025 | |
|---|---|---|
| GST rate | 18% | 5% |
| Input tax credit | Allowed | Not allowed |
| Option to pay 18% with credit | — | No |
The services covered are group 99972 of the services list: hairdressing and barbers, cosmetic treatment, manicure and pedicure, health clubs, fitness centres, salons, spas and yoga.
What "without input tax credit" means for you
- GST you pay on products, rent, equipment and services used for these services can no longer be set off against your GST. It becomes part of your cost.
- On a ₹1,000 service the customer now pays ₹1,050 instead of ₹1,180 — but your margin has to absorb the GST on what you buy.
- Selling products too — shampoo, creams, supplements? Those are goods at their own rates. Credit on inputs used only for the services cannot be taken; for inputs used for both, ask your CA how to split the credit (rule 42 of the CGST Rules).
Billing it right
- Use a SAC from group 99972 (for example 999721 for hairdressing and barbers) and charge 5%: CGST 2.5% + SGST 2.5% for a customer in your State.
- Packages and memberships billed or paid on one side of 22 September 2025 and used on the other: the dates of invoice, payment and service decide the rate (section 14 of the CGST Act). Ask your CA for those.
- GST registration is compulsory once a service business crosses ₹20 lakh of turnover in a year (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura).
In the app
Choose the "service business" type and the item list already has Haircut, Facial, Gym Membership and Yoga Classes at 5% with their SAC; repairs, cleaning and other services come at 18%.
Sources
- GST Council — 56th meeting, PIB press release of 3 September 2025 (beauty and physical well-being services, 18% to 5%)
- FAQs on the decisions of the 56th GST Council, 3 September 2025 (5% without input tax credit)
Checked against the official text on 07-11-2026. This is general information, not tax advice.