Tyre industry seek GST relief to bring down operating costs

ATMA also voiced concerns about the potential accumulation of unutilized Input Tax Credit (ITC) with tyre dealers once the rate changes are implemented.
| Photo Credit:
SAMPATH KUMAR GP

The Automotive Tyre Manufacturers Association (ATMA) has sought GST relief on tyres, saying that lowering rates would directly reduce vehicle operating costs and help bring down logistics costs.

Currently, all major categories of automotive tyres attract GST at 28 per cent, the highest tax slab, whereas tractor tyres and aircraft tyres are taxed at 18 per cent and 5 per cent respectively.

In a letter to the Finance Minister, ATMA pointed out that tyres are an essential enabler of mobility across all segments—trucks and buses, passenger cars, two- and three-wheelers, tractors, construction and mining equipment—and therefore merit much lower taxation under the proposed GST rate rationalisation exercise.

Tyres are indispensable to the movement of people and goods across India. Given their essential role in supporting national priorities of agriculture, logistics efficiency and infrastructure, tyres should not be treated on par with luxury goods, Arun Mammen, Chairman ATMA said.

Especially in sectors such as transportation, agriculture, mining, and construction—where tyres form a significant component of operating expenditure—a lower GST rate of 5 per cent would provide meaningful relief to small traders, farmers and enterprises that rely on affordable transportation.

ATMA also voiced concerns about the potential accumulation of unutilised Input Tax Credit (ITC) with tyre dealers once the rate changes are implemented. To mitigate working capital blockage, the association has recommended that revised rates be announced at the earliest, and a one-time refund of unutilised ITC arising out of GST rationalisation be allowed.

Published on September 1, 2025