Industry views on upcoming GST reforms
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.
Dr Pawan Munjal, Executive Chairman, Hero MotoCorp shares;
“We commend the government’s timely and forward-looking decision to reduce GST on two-wheelers. This progressive step will serve as a crucial enabler, offering much-needed relief to first-time buyers—particularly in rural and semi-urban areas—where two-wheelers remain the backbone of personal mobility. It will significantly enhance accessibility and affordability for millions of Indians.
The two-wheeler industry is not only a key driver of mobility but also a vital pillar of the national economy, contributing substantially to government revenues and generating employment across its value chain. By stimulating growth in this sector, the government has reaffirmed its commitment to empowering the common citizen while strengthening the foundation for long-term competitiveness under the 'Make in India' vision.”
Ajinkya Firodia, Vice Chairman of Kinetic India states;
"Rationalisation of GST is a good idea to remove complexity and bring about uniformity and the right direction for our country. However, there are reports of tax reduction only in smaller capacity vehicles (up to 300 cc) and an increase in above 300 cc. Since the majority of the market, over 2 crore per annum, is already in the lower category, there is no need to create this divide and a mid ground but common tax should be implemented."
"Moreover, we still need to support EVs. EVs, after all these years of subsidy, are finally getting accepted and growing; however, penetration is still in single digits at 9 percent. Hence, we should consider subsidy continuation and enhancement for 5 years clearly, till there is a 40–50 percent shift to the same. For funds, therefore, we needn’t rationalise from 28 to 8 but can instead make a common 15 percent for petrol and enhance subsidy back to Rs. 15,000 per kWh. This will serve all purposes."
