Excise teams raid top salons in Chandigarh for tax evasion

Top salons located across the city are under the scanner for tax evasion, after joint raids were conducted by officials of the UT Excise and Taxation Department and Central Goods and Service Tax (GST) in the past two days.

Acting on repeated complaints of tax evasion, officials raided more than 12 salons across the city on Thursday and Friday, and seized records.

According to officials, surveys would be carried out for proper assessment of the GST evasion. Apart from the recovery of unpaid taxes, heavy penalties would be imposed on the violators, they said, adding that many salons were allegedly charging hefty rates for services such as haircut, hair colouring, make-up, spa treatment and premium wedding packages without levying the mandatory 18% GST.

The officials seized documents from prominent salons located in Sectors 8, 9, 26, 35, and other areas. The authorities are now scrutinising the GST returns and transaction records of these salons of the past three years.

During investigations, it was found that salons issued invoices with “discount” tags to hide taxable services and evade tax.

The officials stated that bills were not issued to the customers and payments were often collected in cash. Scrutiny of records revealed only sales of beauty products, while the income generated by providing services was not mentioned in the papers.

In one of the raids, the Central GST team inspected a luxury salon in Sector 9, with daily sales running into lakhs. The salon offers premium services ranging from hair styling and colouring to advanced skin treatments and bridal packages. Officials expected a large amount of tax recovery from this establishment alone.

The Excise Department has stated that the drive would be extended to other salons and beauty parlours in the city. Tax recovery would be undertaken and heavy penalties imposed with interest on violators.

The department has appealed to consumers to insist on a bill when availing of salon service. “Paying GST not only strengthens government revenue but also safeguards consumer rights,” an official said.