The government has introduced GST in order to curb endless number on taxes in the market and the same is going to establish an impact on the wellness industry.
GST made its way into our daily lives on 1st July 2017 and various changes have popped up ever since. The way people used to carry on with their budgets and lives has been modified a bit. GST stands for Goods and Services Tax which is an indirect tax. It has replaced many taxes which came under central and state governments. This move has made the taxation process easier as people do not have to file for various rounds of procedures to get even the simplest things done. It has affected all the sectors and has also cast its impact on the wellness industry. Various segments of the wellness industry are experiencing certain changes in the way market works. GST has also impacted on the way consumers choose their services as the new move will take a little more time to settle in with the consumers and the market.
Prasanjeet Roy, CEO & Co-Founder, Fabogo, says, "GST is overall a good reform, although it comes with a few minor hiccups, including getting in sync with the operational compliance which would probably stabilise in few months. Being an aggregator for the beauty industry, this reform brings the much-needed change and would allow us to take credit for all the taxes we paid on goods and services. Same applies to entire beauty and wellness industry where hopefully this will help in reducing the cost of services and in turn increasing the customer base."
The Salon industry
The salon industry is set to face many changes with the implementation of GST. The Goods and Services Act has brought with it certain new rules which are meant to bring convenience to the consumers. The salon industry has experienced growth and is set to expand more in the years to come. The revenue growth is set to improve in the coming five years and will be a $ 58.7 billion industry by 2019. GST is going to help consumers and might prove to be a blessing for the industry.
"I think the GST structure is not in line with our particular service sector of beauty and wellness. It is very difficult to balance the increase in rates and maintain the flow of our clientele. It is definitely going to affect my business", says Jeetendra Samtani, franchise owner of Juice Salon, Pashan, Pune
The Spa Industry
The spa industry is a very established one in certain parts of the world. It has climbed heights of success and has the potential to grow further. The industry brings in new trends which let the consumer to choose from a huge variety of services and maintains their curiosity in the market. The spa industry is doing well in the Indian market with demand for the services increasing to 7.9%. Entrepreneurs look forward to investing in the industry as the scope for growth seems bright and large. GST is going to bring in changes for the good of the industry and seems to help in moving the market ahead.
GST is a good thing for the spa industry. The difference between the service tax and GST is a mere 3%. We were charging our customers' service tax 15% while now GST is 18%. It would also be good cause the govt has come up with input credit. The Beauty products are charged at 28% so now the spa industry would get a deduction which was not previously done.Also by having GST, cash transactions leading to black money would to a certain extent be reduced, says Farooq Merchant, owner of Bamboo Tree Spa, Mumbai.
The Healthcare industry
Healthcare sector is among the largest sectors in terms of revenue and employment. GST is expected to do well to the healthcare industry. The pharma sector is the one which is going to benefit a lot from this new move. The pharmaceutical industry deals with 8 different taxes and GST is going to demolish this problem of dealing with each one of them. It will streamline the taxes, making it just one tax to pay in the end for all the services being provided. Pharmaceutical companies are going to feel the difference as GST will rationalise their supply chain which adds up to 2% to the country’s pharmaceutical industry. The biggest benefit though GST will be a reduction in the overall transaction cost as CST (Central Service Tax) has been withdrawn.
The Wellness Products industry
Wellness products involve from cosmetics, supplements to consumable products like cereals etc. The consumers are keener in investing in the industry as it deals with their everyday requirements. The wellness products are a part of everyone’s daily routine and it is hard to avoid them. They are required in one way or the other. The industry is expanding at a faster rate and evolves on various segments of it. GST implemented is set to affect the industry and the products in a way which will help the economy and market to grow.
“India is a primarily a protein deficient country, the normal diet that we have does not fulfil the ideal body requirement of proteins. People nowadays have started realising the fact and hence have become much more aware of their food intake. Health supplements help them fulfil this requirement and not only the people in Tier 1 cities but also in Tier 2 and Tier 3 cities have started becoming careful about it. With the current hectic work schedules, a lot of people rely on these supplements and the government should realise that putting a higher tax slab such as that of 28% would make it difficult for people to take good quality proteins. I think the government should work towards making supplements more accessible and readily available because, at the end of the day, they’re for a good cause. Today health supplements like whey protein form an essential component of the diet of an Indian sports athlete competing at the world stage. This health supplements industry is a multi-billion dollar industry and everyone including the athletes, sports personalities consume it and with such high usage, I think the taxes should be kept as low as 5%.”, says Dr Ankush Sabharwal, CEO, Body Building India.
The move of launching GST is a good initiative taken by our government. Though the government looks forward to providing convenience and good services to its people, it may take some time for the consumers and market to really settle around it. GST seems to solve the problem of dealing with many taxes on various services. The changes are somewhat new for the consumers to understand but will surely benefit the wellness industry by all means.