Slashing GST Rates: A New Era of Affordable Personal Care

The recent decision by the GST Council to slash the GST rate on beauty and physical well-being services from 18% to 5% is expected to make personal care significantly more affordable for consumers across the country.

This rate cut, part of a broader rationalisation initiative, aims to alleviate financial burdens for the lower-middle-class and poorer sections of society by reducing costs on daily-use items like shampoos, toothpaste, and soaps. However, liquid soaps will retain a higher tax rate of 18%.

Despite these reductions, questions remain about whether the reduced tax will fully benefit consumers, as service providers may incorporate input costs into their pricing due to the lack of Input Tax Credit (ITC), a point highlighted by tax experts.

(With inputs from agencies.)