GST for beauty Parlor: Rates, Exemption, Eligibility and more

Goods and Services Tax (GST) is a comprehensive tax levied on the supply of goods and services in India. It replaced multiple indirect taxes to streamline the taxation system. Beauty parlors, which offer services such as haircuts, facials, makeup, and other personal care treatments, fall under the ambit of GST. These services are taxable, ensuring transparent billing and proper tax compliance.

Registering under GST not only helps beauty parlors comply with legal requirements but also allows them to claim input tax credit on business-related purchases. Moreover, it enhances their credibility and trust among clients.

In this article, we’ll explore everything you need to know about GST for beauty parlors, including applicable rates, registration procedures, penalties, and key compliance requirements.

What is Beauty Parlor under GST law?

Under GST law, a beauty parlor is classified as a service provider offering personal grooming, cosmetic, and beauty treatment services. These include services such as:

As per the GST regime, these services fall under the category of beauty and wellness services, which are taxable. The beauty parlor is considered a supplier of services under GST and is required to register if its aggregate turnover exceeds the threshold limit (Rs 20 lakhs for most states, Rs 10 lakhs for special category states).

Beauty parlors must issue GST-compliant invoices, charge the appropriate GST rate (generally 18%), and file regular returns. They are also eligible to claim Input Tax Credit (ITC) on GST paid for business-related expenses like salon equipment, cosmetics, furniture, and rentals—provided they are registered.

GST Rate for Beauty Parlour Services

Beauty parlors offer grooming and wellness services, and under GST law, these services are taxed based on their nature and classification under specific SACs:

Exemption of GST registration For Beauty Parlors

Beauty parlors may get exemption from GST registration only if they meet specific conditions under GST law. According to the Central Goods and Services Tax Act, 2017, a service provider does not need to register under GST if their services are provided within the same state and fall below the prescribed threshold turnover.

However, if the beauty parlor provides services in multiple states or through e-commerce platforms, GST registration becomes mandatory regardless of turnover.

Eligibility Criteria of GST registration for Beauty Parlors

Under the Goods and Services Tax (GST) framework in India, beauty parlors are required to register for GST based on specific criteria:

• Turnover Threshold: Beauty parlors must register for GST if their annual aggregate turnover exceeds Rs 20 lakh in most states. For special category states, the threshold is Rs 10 lakh.
• Voluntary Registration: Even if a beauty parlor's turnover is below the prescribed limit, it can opt for voluntary GST registration. This allows the business to avail input tax credit, issue tax invoices, and enhance its credibility among customers and suppliers.
• Inter-State Services and Online Bookings: If a beauty parlor provides services across different states or through online platforms, GST registration becomes mandatory, irrespective of turnover. This ensures compliance with GST laws for inter-state and e-commerce transactions.

How Can A Beauty Parlor Register for GST?

Below is a step-by-step guide to help the beauty parlor owner register their business under GST:

Step 1: Check the eligibility criteria

Beauty parlors must register under GST if their annual turnover crosses the threshold limit that the government has set. They also need registration if they provide services in more than one state or if they accept online bookings. These rules are defined under the Central Goods and Services Tax (CGST) Act, 2017.

Step 2: Start the Registration Process

The beauty parlor owner needs to visit the official GST portal. On the homepage, navigate to the “New Registration” option. The applicant needs to fill in the required information in the form provided. The information includes, email address, PAN of the businesses and mobile number. Once submitted, the system will send an OTP to both the email and mobile number. The owner must enter the OTPs to verify their contact information.

Step 3: Fill Out the Form

Once the contact details are verified, the beauty parlor owner must fill out the GST REG-01 form. In this form the applicant needs to include details like the name of the business, type of business (like proprietorship or partnership). In the form the applicant must also fill in the details of the services that they offer such as haircare, skincare etc. The owner should also provide the required details and documents.

Step 4: Upload the required documents

To compete the registration process the applicant needs to upload the correct documents that matches the official records. Below is a list of few of the documents that a beauty parlor owner must needs to upload:

• PAN card of the business or the owner
• Proof of business address (like rent agreement or electricity bill)
• Bank details (cancelled cheque or copy of bank passbook)
• Passport-size photograph of the owner.
• Business registration proof (certificate of incorporation or partnership deed)
• Authorization letter (if a third party is applying on behalf of the owner)

Step 5: Application Review

Once submitted the GST officer will carefully review the form and all uploaded documents. The officer will check if the information provided is accurate and complete. If everything is found in order, the application will get approved without delay. However, if any document is missing or unclear, the officer may raise a query and ask for clarification or extra documents. The applicant must respond promptly to avoid any delay in the process.

Step 6: Receive GST Certificate

Once the GST application is approved, the GST Registration Certificate is issued online. The beauty parlor owner can log in to the official GST portal and download the certificate. It contains a unique GSTIN (Goods and Services Tax Identification Number) assigned to the parlor. As per GST rules, this certificate must be displayed at the business location for official use and customer reference.

Step 7: File GST Returns Regularly

Once the registration process is completed, the beauty parlor is required to file GST returns regularly. The filing may be monthly or quarterly, based on the parlor’s turnover and the chosen return type. It is important to maintain accurate records of all services provided, bills issued, taxes collected, and expenses incurred. This helps in filing correct returns and avoiding any legal or financial issues. Timely filing ensures compliance with GST laws and prevents penalties, interest, or late fees. It also builds a trustworthy tax record for the business.

GST Return Filing for Beauty Parlors:

Once a beauty parlor is registered under GST, it must file returns as per the rules of the GST law. The frequency of filing depends on the parlor’s annual turnover and the selected return type. Below is a simplified breakdown of GST return filing for beauty parlors:

• GSTR-1: This return captures the details of all outward supplies (services provided). It must be filed monthly or quarterly.
• GSTR-3B: This is a summary return used to declare total sales, input tax credit (ITC), and the final tax payable.

Penalties for Non-Compliance with GST for Ad Agencies:

If a beauty parlor does not follow the GST rules, it can face penalties, fines, and even legal action. The government has set specific fines under GST law to make sure beauty parlors stay compliant and follow all tax regulations properly.

To sum up, it is important for parlor owners follow the rules of GST for beauty parlors. From proper registration to regular return filing, each step helps a beauty parlor stay compliant and build customer trust. Accurate invoices, correct use of input tax credit, and timely submission of returns keep the business legal, professional, and organized. Other than that, if the owners avoid mistakes like late registration or not displaying the GSTIN, they will save money and avoid legal issues.

To make the process easy and error-free, beauty parlor owners can take expert help. Among other service providers, Online Legal India stands out as a trusted and dependable platform that helps beauty parlors with GST registration and on-time return filing. Their team of professionals ensures that all rules and regulations are properly followed.