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GST compliance is one of the most confusing aspects of running a salon in India. This guide breaks down everything you need to know — rates, SAC codes, input tax credit, and how to file correctly.
GST registration is mandatory in India if your annual aggregate turnover exceeds ₹20 lakhs (₹10 lakhs in special category states). If you're below this threshold, registration is voluntary — and often strategic to claim input credit if you're buying significant supplies.
Salon and beauty services attract 5% GST — without Input Tax Credit (ITC). Retail product sales (shampoos, serums, skin care) are taxed at their respective HSN code rates — typically 12% or 18%. You must bill these separately from your services.
SAC 999721: Hairdressing and related services. SAC 999722: Beauty treatment services (facials, waxing). SAC 999723: Manicure and pedicure. SAC 999724: Cosmetic and therapeutic treatments. Using the wrong SAC code is the most common reason Indian salons receive GST notices.
Top 5 GST mistakes: 1) Mixing service and retail product sales in a single invoice line. 2) Using incorrect SAC codes. 3) Not registering despite crossing the ₹20 lakh threshold. 4) Filing GSTR-3B without reconciling with GSTR-1. 5) Not maintaining daily sales records. A modern salon management platform auto-generates GST-compliant invoices and produces monthly GST summary reports.
