Tyre Stocks Rally As Industry Seeks GST Cut To 5% Ahead Of Council Meet

Indian tyre stocks surged on Tuesday, driven by hopes that the Goods and Services Tax (GST) would be lowered in the revised slab.

At the time of writing, Apollo Tyres' stock was up 4.57% at ₹488.95, CEAT surged 5.5% to ₹3,379, JK Tyre was trading 5.1% higher at ₹349, and Tolins Tyres was up 4.9% at ₹160.9.

Proposal To Reduce GST

The Automotive Tyre Manufacturers Association (ATMA), representing six major tyre companies that account for over 90% of India's tyre production, has urged the government to reduce GST rates on tyres as part of the upcoming rate rationalisation exercise.

Currently, all categories of automotive tyres attract the highest GST slab of 28%, while tractor tyres are taxed at 18% and aircraft tyres at just 5%.

ATMA highlighted that tyres are critical enablers of mobility across sectors, including trucks, buses, passenger cars, two- and three-wheelers, tractors, and construction and mining equipment. Given their essential role, the industry body argued that tyres should not be placed in the same category as luxury goods.

The association added that in key sectors such as transportation, agriculture, mining, and construction, tyres account for a significant portion of operating costs. Reducing GST to 5% would ease the burden on small traders, farmers, and enterprises.

The GST Council will convene on September 3 and 4 to deliberate and finalize rate rationalization measures. The Indian government has proposed to change the GST structure by reducing the number of slabs to just two core rates: 5% and 18%.

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