The govt has announced a GST rate cut on physical well-being-related services, effective from September 22.
Experts point out that a rate reduction from the present 18% to 5% is likely to fuel India’s booming wellness industry.
The industry is projected to grow at a 15.89% CAGR between 2025 and 2029.
Looking good and feeling good has gained importance for Indians across different age groups, particularly after the Covid-19 pandemic. The government’s move to reduce the goods and services tax (GST) on beauty and physical well-being-related services, including gyms, yoga centres, and health clubs, from the present 18% to 5% is likely to fuel more demand in India’s booming wellness industry, experts told Outlook Business.
“It is expected that the move will lower out-of-pocket expenses and will make these services more affordable, particularly for urban middle-class and lower-income segments,” Sanket Desai, Indirect Tax Partner, Consumer Products and Retail Sector, EY India, said. “Price-sensitive consumers, who previously viewed such services as discretionary, may now consider regular usage,” Desai added.
India’s health and wellness market is projected to grow at a 15.89% compound annual growth rate (CAGR) from $2.30 bn in 2025 to $4.15 bn in 2029, according to Statista. The industry comprises services, including beauty care, slimming and fitness, and rejuvenation centres like spas. Major players in the industry include gym chains like Cure.fit, Anytime Fitness, and Gold’s Gym India. In July this year, Mukesh Ambani-led Reliance Industries made a minority investment in UK-based FACEGYM to bring its signature facial workouts to India via standalone studios and select Tira stores. The KM Birla-led Aditya Birla Group is also present in the sector in partnership with Fitternity.
What’s Behind Rate Reduction?
The Narendra Modi-led government’s move to reduce the GST tax rate from four slabs (5%, 12%, 18%, 28%) to the two-tier structure (5%, 18%) aims to boost consumption across different sectors. Though there is a special 40% rate, it is reserved for select sin and luxury goods. Experts highlight that the rate reduction, which will be effective from September 22, marks a conscious shift in the government’s view of the services provided by the wellness industry from being treated as a luxury reserved for a few to a necessity.
“This recommendation goes beyond the arithmetic of taxation, it signals a conscious policy recognition that personal well-being can no longer be treated as a luxury reserved for a few, but as an everyday necessity that contributes to preventive health,” Rahul Shekhar, Partner-Indirect Tax, Nangia Andersen said. Nangia Andersen is an audit firm.
What It Means for Stakeholders?
The tax cut move is set to benefit stakeholders, including consumers and industry. While for consumers it will offer an opportunity to avail themselves of these services without much pinch on their pockets, for the industry it is likely to act as a motivation to expand in the sector.
“This significant reduction marks a win-win for consumers, as they benefit from immediate cost relief, especially the urban and lower-middle strata for whom salon visits and fitness routines now feel refreshingly affordable,” Shekhar said. “Meanwhile, the industry can expect an uptick in footfalls, as self-care becomes fiscally lighter,” he added.
