Don't Let GST Crush Your Dreams Of Running A Beauty Parlour! Follow These Tips Instead

There are a few services that will have no shortage of customers irrespective of the state of the economy: beauty parlours and salons are among these services.

Since beauty parlours are service providers, they fall under the ambit of GST. However, even seasoned business owners have some trepidation about the GST registration process. Many think of GST as a hurdle in their path to achieving their dream of opening a beauty parlour.

The process for gst registration online is not as complicated as it is made out to be. You just need to be clear about the registration process itself and its intricacies.

Do You Have To Register For GST?

Contrary to popular belief, GST is not mandatory for every business. Businesses and service providers whose aggregate turnover does not exceed INR 20 lakhs per annum need not necessarily register for GST.

If your business is located in the North-Eastern states or special category states such as Uttarakhand, Himachal Pradesh or Kashmir, then the cutoff turnover of GST registration is INR 10 lakhs instead of the INR 20 lakhs. If you are a branded salon, then you have to register for GST irrespective of your turnover.

However, GST registration is a good practice. If you haven’t registered, but your turnover exceeds the threshold in a financial year, then you will find yourself scrambling to finish all the formalities on time.

What Are The Documents Needed For GST Registration?

The following documents are required for GST registration.

Photograph

Sole Proprietor: You need to submit a recent passport size photograph of yourself.
Partnership/LLP: You need to submit the recent passport size photograph of all the partners and the authorised signatory.
The photograph should be JPEG format, and its size should not exceed 100 kB.

PAN Card

Sole Proprietor: You need to submit the PAN card details of the owner.
Partnership/LLP: The PAN card details of all the partners and the those of the authorised signatory should be submitted.

Aadhaar Card

Sole Proprietor: You need to submit the Aadhaar card of the owner.
Partnership/LLP: The Aadhaar card of the authorised signatory is the only one needed.

Bank Details

You can either present a cancelled cheque or the first and last pages of your passbook.
The documents can be in JPEG or PDF format.
The size of the file should be under 100 kB.

Address Proof Of Owner

You need to submit an address proof in the form of a passport, driving license, voters identity card, Aadhar card or ration card.
If your business is a partnership/LLP, then you need to submit the address proof of all the partners.

Address Proof Of Principal Place Of Business

You can submit the address proof of your principal place of business by providing the electricity bill, property tax receipt, etc.

If you own the building, then you must submit the ownership deed.
If the property is rented or leased, then you must submit the lease or rent agreement.
If it is a shared property or you are operating on a consent basis, then you must submit the NOC or consent letter.

Additional Documents For LLPs And Partnerships

In addition to the documents mentioned above, LLPs or partnerships must also submit the following documents.

Copy of the partnership deed
Proof of appointment of the authorised signatory
Board resolution or registration certificate of LLPs

Once you have the documents in order, visit the GST registration portal and fill GST REG – 01. Upload the documents along with your digital signature. Once verified, you will get a unique GSTIN registration number along with your certificate.

Important Points To Note

Tax Slab

The GST rate for the services provided by salons and beauty parlours is 18%. However, a few services come under the luxury category and may attract a 28% GST.

Filing Returns

You need to file all your GST returns by the 20th of every month. You will need to file GSTR 1, 2 and 3 on the GST portal.

Input Tax Credit

Beauty parlours and salons are eligible for the input tax credit or ITC under the GST Act. It means that the tax that you have already paid while purchasing raw materials or inputs for the business can be reduced while calculating the GST in the final service.

Conclusion

One of the major pain points for beauty parlours is that the prices for their services have increased under the GST Act. However, considering that the rates have gone up uniformly across all salons, you won’t lose customers over GST implementation.

Another common complaint is regarding the process itself. As you can see from above, the actual process of GST filing is pretty straightforward once you get the hang of it. You only need to supply the documents required for gst registration and maintain proper invoices. a