The Hair and Beauty Federation, India, representing over 80 lakh salons and one crore members of the hair and beauty industry, has urged the government to reconsider the Goods and Services Tax (GST) levied on salon services. In a letter addressed to Finance Minister Nirmala Sitharaman and Industry and Commerce Minister Piyush Goyal, the federation has demanded GST exemption for basic services and a reduced GST rate for others.
Currently, these essential services, including haircuts, shaves, threading, waxing, hair dye, and nail care, attract an 18% GST, both on the services themselves and the products used. This double taxation places a significant financial burden on both salon owners and customers, particularly those from lower-income groups. The federation argues that these services are not luxuries but basic necessities and should not be subject to such high taxation.
Also Read: Fiabila Redefines the UV Gel Concept in Nail Paints
The federation highlighted the challenges faced by the industry, especially after the COVID-19 pandemic. Footfall in salons has decreased by 35-40% due to the rise of home services, which offer cheaper and more convenient options for customers. This shift has led to semi-unemployment among salon workers and those providing home services. The intense competition within the market, with salons offering deep discounts and low prices, further squeezes profit margins.
Salon owners are struggling to increase service prices despite rising inflation affecting various operational costs, including rent, utilities, and cosmetics. They also bear the burden of paying GST on consumables like tea, coffee, and water offered to clients. The federation emphasized that while market inflation rises daily, salon service prices increase only every 3-5 years.
Also Read: Fine Acers to Open First Regenta Spa and Resorts in Pushkar by March 2025
The Hair and Beauty Federation has put forth two primary demands: first, an exemption of GST on basic and essential services like haircuts, shaves, threading, waxing, hair dye, and nail cutting; and second, a reduction of GST to 5% on all other salon services. The federation believes these measures will provide much-needed relief to the struggling industry and ensure the affordability of essential grooming services for all citizens. Ashok Paliwal, President of the Hair and Beauty Federation, India, spearheaded this initiative to address the pressing concerns of the industry.
