Starting September 22, 2025, your gym or yoga membership is likely to cost less, thanks to a significant reduction in the Goods and Services Tax (GST) on fitness and wellness services. The GST Council, in its 56th meeting, decided to slash the GST rate from 18% to 5% for services offered by gyms, fitness centers, yoga centers, salons, and barbers. This move is expected to ease the financial burden on households, especially benefiting the middle class, youth, and working professionals.

Impact on Fitness and Wellness Services

The reduction in GST aims to make fitness more affordable and accessible to a wider section of society. Fitness, once considered a luxury, is now being incentivized as a crucial component of a healthy lifestyle. With the new rate, a service costing ₹1,000, which previously had a GST of ₹180, will now only have a GST of ₹50. This translates to potential savings of approximately 13% for customers.

This initiative aligns with national health initiatives such as the Fit India Movement, which emphasizes preventive care and lifestyle changes to reduce chronic illnesses. By making these services more affordable, the government hopes to encourage regular wellness practices and promote a healthier and more active India.

Broader Impact and Related Changes

The GST reduction extends beyond fitness services to include a wide array of personal care and daily-use items. Taxes on items like hair oil, toilet soap bars, shampoos, toothbrushes, toothpaste, talcum powder, face powder, shaving cream, and aftershave lotion have also been reduced to 5% from the earlier 12% or 18%. However, some items like liquid soaps and mouthwash will continue to be taxed at the previous rate.

The government has also increased GST on goods with added sugar, flavoring, or carbonation from 28% to 40% to discourage consumption and generate revenue for public health. These reforms reflect a multi-thematic approach to improve the lives of citizens by making healthier choices more affordable.

Potential Challenges and Considerations

While the GST cut is expected to lower bills for consumers, some experts suggest that the absence of input tax credit (ITC) for service providers could dilute the benefit. Without ITC, businesses cannot offset their input costs (such as rent, consumables, and maintenance) against their tax liability. This may lead some providers to partially pass on these costs to consumers, potentially limiting the overall savings.

Government’s Vision and Long-Term Goals

The government views these GST reductions as more than just tax changes, describing them as measures that will improve affordability, enhance mobility, promote healthier lifestyles, and strengthen key industries. By lowering GST rates on gyms and fitness centers, two-wheelers, and small cars, the government aims to reduce the financial burden on households while advancing its long-term vision of encouraging healthy living, affordable transportation, and improved ease of life.

These reforms are designed to reshape how India funds healthcare and align with the 2047 Viksit Bharat goals. The government is focused on strengthening the fitness ecosystem through various schemes, including the Fit India Movement and Khelo India, which promote regular physical activity and expand access to sports infrastructure.