ATMA Seeks GST Relief on Tyres to Support Mobility, Lower Logistics Cost

Lowering GST rates on tyres would directly reduce vehicle operating costs and help bring down logistics costs, while also extending benefits to farmers, small traders, service providers, and the infrastructure and mining sectors, Automotive Tyre Manufacturers Association (ATMA) has stated.

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

In a communication to the Union Finance Minister, ATMA has emphasised that tyres are an essential enablers 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”, said Mr Arun Mammen, Chairman ATMA.

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% would provide meaningful relief to small traders, farmers and enterprises that rely on affordable transportation.

In addition, ATMA has flagged concerns regarding potential accumulation of unutilised Input Tax Credit (ITC) with tyre dealers once rate changes are implemented. To mitigate working capital blockage, ATMA 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.