The Indian salon industry is a vibrant sector experiencing rapid growth. It is facing a major challenge: high Goods and Services Tax (GST) rates. Despite its undeniable contribution to the beauty and wellness market, the industry is struggling under the burden of an 18% GST levy. This tax, implemented in 2017, is straining profitability for salon owners, many of whom are small businesses, and ultimately impacting customer affordability.
Recognizing the detrimental effect, the Hair and Beauty Federation (HBF), a prominent industry body established in 2023, has formally appealed to Finance Minister Nirmala Sitharaman for a GST reduction. Led by President Ashok Paliwal and a team of industry veterans, the HBF represents over 60 member associations and aims to create a unified voice for the sector. Furthermore, it features prominent figures from the industry such as Uday Takke, Dr. Madhumita Saikia, Indira Ahluwalia, Vice President Savio John Pereira, General Secretary Nirmal Randhava, and others.
“We request the ministry to reduce the GST from 18% to 6% because hair cutting, beauty, and wellness should be considered as health services and not counted under the luxury sector. Our customers do not want to pay the exorbitant GST rates.”
The consequences extend beyond immediate financial strain. The high GST rate limits the industry’s ability to invest in crucial areas. Salon owners struggle to allocate resources for quality products, staff training, and advanced equipment – essential elements for growth and maintaining a competitive edge. Additionally, freelancer beauticians and apps with home salon services offer more affordable services that lead to lower footfall in salons. This has led to the formalized salon industry to suffer.
The HBF’s appeal goes beyond immediate financial relief. A reduction in GST would foster a more sustainable and vibrant salon industry. Increased affordability would attract a wider customer base, stimulating industry growth and creating new employment opportunities.
The Federation’s plea reflects the industry’s hope for a collaborative approach with the government. By addressing the concerns surrounding GST rates, a more supportive tax structure would empower salon owners, enhance customer experience, and ultimately contribute to the economic well-being of the nation.
