GST on salon products: which are 5% and which are 18%

GST on salon products depends on the product, not on the salon. Since 22 September 2025, shampoo, hair oil, talcum and face powder, toilet soap bars, toothpaste and shaving cream are 5%. Most other things on a salon shelf, such as conditioner, serum, hair masks, hair colour, gel, creams, make-up and perfume, are 18%. Products you sell are billed at their own rate, even on the same bill as a 5% service. Products you use in services carry no input tax credit.

Salon products at 5% GST

The September 2025 changes cut GST to 5% on a short list of everyday personal-care goods. The GST Council’s FAQ says the aim was to lower costs on daily-use items, and that rates were not set by brand or price. So a premium salon shampoo is 5% just like a supermarket one.

• Shampoo and hair oil (HSN 3305)
• Talcum powder and face powder (HSN 3304)
• Toilet soap in bars, cakes or moulded pieces (HSN 3401)
• Toothpaste, tooth powder and dental floss (HSN 3306)
• Shaving cream, shaving lotion and aftershave lotion (HSN 3307)
• Mehendi paste in cones (HSN 1404 or 3305)
• Combs, hair slides, hairpins and curlers (HSN 9615), other than electric ones

Salon products at 18% GST

Everything else in the same chapters stays at 18%. These are the ones salons sell most:

• Other hair preparations (HSN 3305): conditioner, serum, hair masks, hair colour and dye, gels, wax, hair spray
• Beauty and skin-care preparations (HSN 3304): face creams, moisturiser, sunscreen, make-up, nail polish and other manicure or pedicure preparations
• Perfumes and toilet waters (HSN 3303)
• Deodorants, bath preparations and depilatories (HSN 3307), including hair-removal creams
• Liquid or cream skin washes for retail (HSN 3401): face wash, body wash, liquid hand wash. Only bar soap is 5%.
• Electric hair dryers, straighteners and trimmers (Chapter 85)

A quick table for your product list

The surest check is your supplier’s tax invoice. It shows the HSN code and the rate they charged you, and your selling rate should normally be the same. Rates can be changed by later notifications, so look again whenever your CA mentions a GST Council meeting.

HSN codes on your bills

A tax invoice must show the HSN code for goods (and the SAC for services). How many digits depends on your total turnover last year:

• Up to ₹5 crore: 4 digits, such as 3305. On bills to clients who aren’t registered for GST, which is nearly all salon bills, you may leave the code off.
• Over ₹5 crore: 6 digits, such as 330510 for shampoo.

Even when the bill can skip the code, your CA still needs an HSN-wise summary of sales for the GST return. That is much easier if every product in your list already has its code.

Back-bar products and input tax credit

Here is the part that costs salons money. Salon services are taxed at 5% without input tax credit. CBIC’s FAQ says credit on goods and services used only for those services must not be taken, and credit on things used for both services and other sales must be reversed in proportion.

• Back-bar stock (colour, developer, basin shampoo, wax, facial kits, gloves, foil): the GST you pay is a cost. Price your services with it in. See pricing salon services.
• Retail stock bought only to resell: the GST may be claimable, because the sale is taxed. Keep retail purchases separate from back-bar purchases so your accountant can tell them apart.
• Products bought for both (the same shampoo sold and used at the basin): your accountant works out the share to reverse.

Tracking which bottles go to the basin and which to the shelf is where a simple stock routine pays for itself.

Billing retail on the same bill as a service

A client has a haircut and buys a shampoo and a serum. One bill, three lines, two rates:

The GST summary at the bottom of the bill groups the tax by code and rate: 5% on 9997, 5% on 3305, 18% on 3305. Keep products as separate lines rather than hiding them inside a service or package price, so each item gets its right rate.

Setting it up without mistakes

1. List every product you sell, with the HSN code from the supplier’s invoice.
2. Set the rate: 5% for the items in the first list, 18% for the rest. Older rates of 12% and 28% no longer apply to these items.
3. Mark each product as “for selling”, “for services” or both, so stock and credit stay clear.
4. Check one real bill with your CA before the month ends.

Then check your shelf prices. The price on a pack (MRP) already includes GST. If a brand lowered its price on a 5% item after the cut, update your price list so the client isn’t asked for more than the new pack price. If you price retail yourself, decide whether your price includes GST and keep it the same way for every product, so the till and the shelf label always agree.

In Frizzi, each product has its own HSN code and rate. When you add one, Frizzi suggests 5% or 18% from the code or the name (shampoo, hair oil, talc, soap bars, toothpaste and shaving cream at 5%), and you confirm it. The code stays on each bill line and in the HSN/SAC summary report. See stock and inventory and GST billing.

Questions