GST Becomes a Headache for Cosmetics & Beauty Industry

GST Becomes a Headache for Cosmetics & Beauty Industry

The countdown to the wedding season has already begun and Durga Puja is less than 100 days away. In any given year, this is the time when the beauty industry burns the midnight oil to meet clients’ demands and experiences brisk business. However, this year, with the announcement of a steep 28% GST on cosmetics, the industry -from suppliers to shop owners and makeup artists to celebs -is in a state of shock. Ajay Kumar Shaw from The Royal Stores, a cosmetics shop in New Market, is certain that with the wedding season round the corner, their business will take a huge hit.”Earlier there was a 14.5% tax on cosmetics. From that to 28% is an enormous hike.

At present we are selling products at the old MRP as the new stock with revised prices is yet to arrive. Our sales will definitely nosedive this wedding season,” he said. Most shops are still confused as to the implementation of GST and are clueless about the revised product prices. Pallab Shaw from Shaw Brothers Store Pvt Ltd said, “Until the new stock with revised prices arrives, utter confusion will ensue.Such a huge tax on cosmetics will surely have an adverse effect on our business.”


Many customers are stocking up on products by purchasing old stocks in bulk now, as the same products will get costlier when the new stock arrives. So, a number of shops have run out of stock too. Even some sup pliers are not taking new orders due to GST. “None of our suppliers was taking orders until a few days back. So the new stocks will still take some time to arrive.Also, customers are indulging in bulk purchases till we get the fresh stock. All this is leading to even necessary items running out of shops,” explained Parimal Majumder from Nabarupa, adding that people will now think twice before splurging on cosmetics. “Our business is set for a big downfall this Puja and wedding season,” he said.

Makeup artists too are left with no option but to increase their remunerations. “As of now I am using old makeup in pho toshoots and wed dings but I’ll have to eventually increase my rates or else it would be difficult to survive,” said makeup artist Aniruddha Chakladar, who plans to revise his fee only after purchasing prod ucts at the new MRP . Echoing similar sentiments, makeup artist Nabin Das said, “I will increase my remuneration after Puja, as all the high-end products we use on models and brides will get expensive. For those who have already paid in advance, we are ready to bear the brunt. But, keeping the profit margin in mind, there’s no option but to hike our rates sooner or later.”


With tax on services going up to 18% from 15.5% earlier, coupled with 28% GST on cosmetics, beauty salons are grappling with the potential repercussions. Sharmila Singh Flora from Flora’s Beauty Parlour said, “We have no option but to increase the prices of all our services. A bottle of shampoo, which earlier cost `345, will come for approximately `354 from mid-July . Depending on the price of the products and keeping the service tax in mind, we are still working on the revised prices of services. First demonetisation and now steep tax on cosmetics will cripple the industry.”

Gouri Bose from Shakamvari agrees that their business, which finally started looking up after suffering the side-effects of demonetisation for months, will again hit a low, thanks to GST. “With Puja and wedding season knocking at the door, the situation is quite grim. Cosmetics are set to get costlier and our services are totally dependent on that. We are still calculating the revised service prices, so that customers don’t have to pay much after GST is implemented. But a regular facial, which is now for `800, will cost round about `860 after GST,” said Bose.

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