Salon GST invoice: 5%, not 18%, and what the bill must show.

The short answer

What is the GST rate on salon services in 2026?

5% (2.5% CGST + 2.5% SGST, or 5% IGST), with no input tax credit. The change came through Notification No. 15/2025-Central Tax (Rate) dated 17 September 2025, issued after the 56th GST Council meeting, and applies from 22 September 2025. The entry covers "beauty and physical well-being services falling under Group 99972", which is the SAC group that includes hairdressing and barbers, cosmetic treatment, manicure and pedicure, spas, and health and fitness centres.

Two details matter more than the headline rate:

• It is not optional. CBIC has clarified that the 5% rate for these services is mandatory. A salon cannot choose to stay at 18% in order to keep claiming input tax credit.
• No input tax credit on what goes into the service. The 5% rate applies on the condition that credit of input tax on goods and services used to supply the service has not been taken. GST you pay on rent, professional products used on clients, equipment and software used for the service can no longer be set off. If you also sell retail products, ask your CA how to split credit between taxable retail sales and the 5% services (Rule 42 of the CGST Rules deals with apportionment).

Before 22 September 2025 these services sat in the residual "other services" entry at 18% with credit. That is why so many older articles, invoice templates and even some billing apps still default to 18%. If your billing software still adds 18% to a haircut, your clients are being overcharged and your returns will not match the law.

Do you need to charge GST at all?

Only a GST-registered business charges GST. For service providers the registration threshold is an aggregate turnover of ₹20 lakh a year in most states (₹10 lakh in the special category states). Below that, registration is voluntary. If you are not registered, your bill must not show GST or a GSTIN. If you are registered under the composition scheme, you cannot collect tax from clients either and you issue a bill of supply rather than a tax invoice. Your CA should confirm which applies to you; this page assumes a regular GST-registered salon.

Worked example

A salon bill with a service, a discount and a retail product

A client in Hyderabad has a hair spa listed at ₹1,500 with a 10% loyalty discount, and buys a retail serum. The salon is registered in Telangana, so the supply is intra-state and tax is split into CGST and SGST.

The service is 5% whatever the client buys alongside it. The serum is a sale of goods and carries the GST rate for its HSN code, which is not necessarily 5%. Many cosmetic and personal care goods were also re-rated in September 2025, so check the current rate for each product you stock rather than copying last year's price list.

Mistakes we see on salon bills

• Still charging 18% on services. The most common one, usually because the billing app's default rate was never changed.
• One rate for the whole bill. Services and retail products often carry different rates. Tax has to be worked out per line.
• Showing GST without a GSTIN. If you are not registered, you cannot collect GST. A bill that adds "GST 5%" without a registration number is not a valid tax invoice.
• IGST for a local client. For a service performed at your branch, the client's home state normally doesn't change the place of supply. Confirm unusual cases (home visits across a state border, corporate clients) with your CA.
• Breaking the number sequence. Deleting a bill leaves a gap. Cancel it and keep the number instead.
• Prepaid cards and packages taxed twice, or not at all. When a client pays in advance for a package or recharges a prepaid card, the timing of tax depends on whether the amount is an advance for identified services or a voucher. This is one to settle with your CA once and then apply the same way every time.