Indian Service Tax Beauty Parlour

Indian Service Tax

Beauty Parlour

Effective

Date: 16/08/2002

Authority: Notification No. 8/2002-ST, dt. 1/8/2002. (See at the end of this Chapter).

Rate of Service Tax: 8% from 14-5-2003 (5% upto 13/5/2003) 10% from 10.9.2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.

Definitions

"beauty treatment" means face and beauty treatment, cosmetic treatment, manicure, pedicure or counselling services on beauty, face care or make-up, [Section 65 (17)]

"beauty parlour" means any establishment providing beauty treatment services, [Section 65 (18)]

Taxable Service: Beauty treatment services including counselling services provided by beauty parlour to customers.

Value of Taxable Service: Gross amount charged by the beauty parlour in relation to beauty treatment services.

Exemptions

• See Chapter on " General Exemptions"

• Specific exemptions

  (i) Hair cutting, shaving, plastic/cosmetic surgery, hair dyeing, mere sale of cosmetics, skin treatment by a doctor

  (ii) Free services to club members

Person liable to pay: Beauty Parlour.

Exemption

See Notification No. 11/2002-ST, dt. 01/8/2002.

Head of Account

S1. Code SCCD Minor-head 004400152 Beauty Parlours Services 00440208 Sub-head 00440015201 Tax Collection 00440209 113 Sub-head 00440015202 Other Receipts 00440210 117 Sub-head 00440015203 Deduct Refunds 00440211 114

Main text of Departmental Circular/TN

F. No. B11/1/2002-TRU, Date: 1/8/2002

1. The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub­clause or clause means clause or sub-clause of Section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.

2. As per clause (16), "beauty treatment" includes face and beauty treatment, cosmetic treatment, manicure, pedicure or counseling services on beauty, face care or make-up and as per clause (17), "beauty parlour" means any establishment providing beauty treatment services. The taxable service, as per sub-clause (zq) of clause (90) means any service provided, to a customer, by a beauty parlour in relation to beauty treatment.

3. This service covers the beauty treatments such as facial, manicure, pedicure and other make ups provided by beauty parlours. However, it does not include hair cutting and shaving. Further, it does not include plastic surgery/cosmetics surgery done to improve the appearance, as they are not the kind of serVice provided by the beauty parlours. These are more appropriately classifiable as medical services.

3.1 The service provided in relation to hair dyeing has been exempted vide Notification No. 11/2002-ST, dt. 1/8/2002.

4. For providing beauty services, parlours use materials such as cosmetics and toilet preparations. A point has been raised as to whether the cost of such materials will be included in the value of taxable service. It is clarified that these materials are essential for providing the service and they are not sold as such but used for treatment such as facials etc. Therefore, they are integral to the service provided. Hence service tax will be charged on the gross amount and no abatement is admissible on account of the value of material consumed in providing the service.

5. Often beauty parlours also sell cosmetics in retail. Quite obviously, no service tax is payable on mere sale of cosmetics or any other material.