The beauty and wellness industry, one of the fastest-growing segments of India’s service economy, is once again at a pivotal juncture. The recent rollout of GST Reform 2.0 has triggered significant discussions across salons, spas, product manufacturers, and academies. In response, the Beauty and Wellness Association of India (BWAI), under the leadership of Dr Rekha Chaudhari, convened a high-level meeting to decode the reforms, assess their implications, and define the way forward.
The meeting brought together prominent voices including Vikram Bhatt, Director, Enrich; Renu Kant, Founder, Envi Salon and Spa; Kapil Sharma, Founder, Kapil Salon & Academy; Rahul Bhalchandra, Director, YLG; and Prannay Dokkania, Managing Director, Truefitt & Hill. The dialogue emphasised the need for collective action, transparent communication and resilience as the industry adapts to the new tax regime.
BWAI’S LEADERSHIP AND LEGACY
Opening the session, Dr Chaudhari recalled BWAI’s role during the COVID-19 crisis. “At a time when survival seemed impossible, BWAI stood shoulder-to-shoulder with the industry,” she said. Carrying that same spirit forward, she stressed that BWAI is now committed to guiding the sector through GST reforms, ensuring businesses of every scale are heard and supported. She also invited participants to formally join BWAI, reinforcing that a stronger collective voice is essential for effective advocacy.
GST 2.0: DECODING THE IMPACT
• Products: Tax reduced to five per cent only for shampoos, hair oils and face powders; most other products remain at 18 per cent.
• Services: All salon and wellness services are now taxed at five per cent, down from 18 per cent.
• The Catch: Removal of Input Tax Credit (ITC) on rentals, IT, marketing and professional products has increased operational costs by an estimated 8–10 per cent.
While the reduced service tax rate appears consumer-friendly, the ITC withdrawal means higher internal costs for operators—creating a dual effect that complicates pricing strategies.
THE PRICING PUZZLE
For operators, GST 2.0 creates a fine balancing act. A service previously billed at ₹100 will now cost businesses around ₹110 due to ITC loss. Yet, customers will only see a 2.5-5 per cent reduction, far less than the 13 per cent many may expect.
This mismatch poses two key challenges:
• Risk of consumer confusion: Customers may feel underwhelmed by the actual price drop.
• Anti-profiteering concerns: Businesses may come under scrutiny for not passing on ‘perceived savings.’ Members agreed that consistent and transparent communication with clients is vital to prevent misinterpretation.
OPERATIONAL CONCERNS
Several operational challenges were flagged during the discussions:
• Stock treatment: Lack of clarity on ITC reversal for stock as of 21 September.
• Invoice management: Splitting invoices pre- and post-September 21 to optimise credits was suggested.
• Compliance burden: Multi-outlet operators highlighted the increased strain of compliance and reporting requirements.
Training academies were also impacted. Only NSQF-aligned courses remain GST-exempt, leaving many institutes uncertain about their obligations.
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BUILDING A UNIFIED SCRIPT
One of the most decisive outcomes of the meeting was the agreement to establish a standardised communication script for the entire industry. This unified language will be used in all interactions with customers and government officials.
Key measures include:
• Drafting a BWAI-endorsed circular and certificate clarifying that customer savings are limited to 2.5–5 per cent.
• Collecting logos of partner associations via a shared submission form for inclusion in the circular.
• Publishing the official circular on the BWAI website on 28 September.
MEDIA AND INFLUENCER OUTREACH
The group emphasised the importance of clear media messaging to bridge perception gaps. BWAI will work closely with trade media, digital channels and influencers to ensure accurate narratives reach the public. Members have been invited to suggest credible influencer names who can act as spokespersons for the sector.
This outreach strategy aims to educate consumers, safeguard the industry from unfair criticism and prevent unrealistic expectations around GST-driven price drops.
DECISIONS AND ACTION POINTS
The meeting concluded with a structured roadmap:
• BWAI secretariat: Draft and circulate the industry circular and certificate template.
• Associations: Submit logos through the designated Google Form.
• Industry members: Update service rate cards with inclusive GST pricing and maintain compliance documentation.
• PR/media team: Prepare press notes, coordinate influencer outreach, and amplify unified messaging.
• Finance/tax experts: Engage with GST officials to clarify stock treatment and academy-related exemptions.
THE WAY AHEAD
While GST 2.0 introduces added operational costs, it also presents an opportunity for the industry to align, unify and advocate more effectively. Under BWAI’s leadership, the sector is preparing to address customer communication, government engagement and compliance challenges with one strong and transparent voice.
CLOSING REMARKS
Dr Chaudhari closed the session by emphasising five key focus areas:
1. Unified script: Standardise industry communication.
2. Circular publication: Release the official BWAI circular on 28 September.
3. Media support: Amplify the real GST impact through trade media.
4. Influencer advocacy: Engage credible voices to represent the industry.
5. Solidarity: Avoid fragmented messaging and strengthen collective action.
She concluded, “This is not just a tax reform—it is a test of our solidarity. If we remain united and transparent, the industry will emerge stronger.”