GST Diwali Dhamaka: Gyms, salons, dining out, hotels and flight tickets - Key services set to get cheaper

Personal care and wellness services including salons, gyms, yoga centres, and fitness clubs will move to a concessional 5% slab (without input tax credit), down from 18%.

Consumers are set to see lighter bills this festive season as the GST Council’s sweeping rate rationalisation, effective September 22, lowers levies on a wide range of daily services and household items.

Eating Out and Hotels

Restaurant meals will now attract a uniform 5% GST, replacing the earlier 12–18% range. The move is expected to boost casual dining, family outings, and festive celebrations, with restaurant owners hopeful of a surge in footfall. Hotel stays too have become more affordable: rooms priced below Rs 1,000 remain exempt, tariffs between Rs 1,000 and Rs 7,500 will be taxed at 12% (down from 18%), while those above Rs 7,500 continue at 18%. This is likely to ease costs for middle-class families during weddings, festivals, and vacations.

Flight tickets

Airfares are also set to decline. Economy-class tickets will now be taxed at 5% instead of 12%, while business-class fares drop to 12% from 18%. Analysts expect the cut to encourage greater domestic travel during the festive period.

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Salons, Fitness and Wellness

Personal care and wellness services including salons, gyms, yoga centres, and fitness clubs will move to a concessional 5% slab (without input tax credit), down from 18%. Experts say this shift repositions personal care as a basic need rather than a luxury, though absence of ITC could offset part of the consumer benefit.

Daily Essentials

A large basket of household goods will also see reduced prices. Hair oil, shampoos, soaps, toothpaste, and toothbrushes have moved to 5% from 12–18%. Talcum and face powder, shaving cream and aftershave lotion are similarly cheaper, while toothpaste and dental floss are now classified as “basic dental hygiene goods.” Liquid soaps and mouthwash, however, remain in the 18% bracket.

Government’s Stand

The finance ministry stressed that the rationalisation aims to cut household expenditure for lower- and middle-income families while simplifying compliance. It clarified that even though luxury or MNC brands will benefit, imposing GST by brand or value would complicate administration.

Industry View

Rajat Mohan, Senior Partner at AMRG & Associates, said the cuts signal an attempt to make wellness services widely accessible, but warned that lack of ITC could blunt the consumer impact if providers adjust prices upward. “Whether the intended benefits fully materialise will depend on whether companies pass on the tax savings. In the absence of an Anti-Profiteering Authority, that remains a key uncertainty,” he noted.