Industry leaders say the revised GST rates will make skincare more accessible, revive salons, and boost festive demand
In a widely praised move, the Indian government’s decision to lower GST on personal care essentials from 18 per cent to 5 per cent has garnered enthusiastic responses from industry leaders, who view it as a progressive step toward making quality skincare more accessible across India.
Effective 22 September 2025, the GST structure has been radically overhauled, now conforming to a simplified two-slab system of 5 per cent and 18 per cent, replacing the earlier four-tier model, with a 40 per cent slab reserved for luxury and sin goods.
Essentials such as shampoo, toothpaste, hair oil, soap, and beauty services including salons and health clubs, are now taxed at 5 per cent—down from 18 per cent. Estimates indicate the government expects a revenue dip of approximately Rs 48,000 crore, though this may be cushioned by increased consumption and better compliance.
More Than A Tax Reform
According to the industry players, this is more than a tax reform and can be aptly termed as a progressive step. Rahul Shanker, Group CEO of Quest Retail and House of Beauty, which houses The Body Shop in India, remarked: We welcome the government’s GST revision on personal care essentials. We see this as more than just a tax reform. This is a progressive step that makes everyday beauty essentials more accessible to everyone in India. For The Body Shop, this change directly benefits our core categories, including shampoos, soaps, and hair oils. This will enable us to reach more beauty enthusiasts, not just in major cities but also in emerging markets. With the onset of festive season, the timing couldn’t be better. It allows us to share our ethically sourced, cruelty-free products with a wider community at a better value.”
Shaily Mehrotra, Co-Founder and CEO of Fixderma, emphasised the social impact: “The recent GST update is a welcome relief for consumers. When everyday essentials become more affordable, it truly makes a difference in people’s lives.” She expressed that affordability fosters accessibility and trust, allowing good skincare to become part of everyone’s routine.
Vidur Kapur, Director of O3+ Professional, highlighted implications for the service sector: “The recent GST rate cut from 18 per cent to 5 per cent is a move that could boost consumer confidence and revive footfall in salons, spas, and wellness centres across the country.” He noted that lighter GST on salon services will encourage consumers to invest in premium beauty routines at more manageable prices.
From a marketing standpoint, brands are poised to capitalise on the festive season with sharper offers, bundled services, and increased advertising—strategies likely to ignite stronger engagement and demand for beauty products and services.
The broader intent behind the reform, industry observers conclude, is to catalyse domestic consumption, simplify operations for businesses, and provide tangible relief to citizens. For small salons and startups, in particular, the easier tax regime represents a significant opportunity.
