Apollo Tyres, MRF, other tyre stocks rally up to 5% on hope of lower GST rates

Apollo Tyres, MRF, other tyre stocks rally up to 5% on hope of lower GST rates

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26 Aug, 2025 12:21

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Tyre makers' shares continued to rise on September 2 post the government's proposed GST reforms announced on August 15.

Shares of JK Tyre & Industries, MRF, Apollo Tyres were up 3-5%.

The Automotive Tyre Manufacturers Association (ATMA), a representative body of six large tyre companies in India that accounts for over 90% of tyre production, has sought lower GST rates in the proposed GST rate rationalisation exercise later this week. ATMA asked the government not to treat it on par with luxury goods, citing its cost impact on key sectors such as transportation, agriculture, mining, and construction.

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, ATMA said in a statement on September 1.

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.

The tyre makers' body further said lowering of GST on automotive 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.

Apollo Tyres and JK Tyre have risen 12% and 11%, respectively, since the government's August 15 GST announcement. MRF and CEAT have risen over 6% during that period.

"Tyres are indispensable to the movement of people and goods across India...tyres should not be treated on a par with luxury goods", Arun Mammen, chairman of the body, said. Apollo Tyres and JK Tyre have risen 12% and 11%, respectively, since the government's Aug. 15 GST announcement. MRF and CEAT have risen over 6% during that period.

Citing a communication to Union Finance Minister Nirmala Sitharaman, Automotive Tyre Manufacturers Association (ATMA) said it has emphasised 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.

ATMA said it has also flagged concerns regarding potential accumulation of unutilised Input Tax Credit (ITC) with tyre dealers once rate changes are implemented.

To mitigate working capital blockage, it has been recommended that revised rates be announced at the earliest, and a one-time refund of unutilised ITC arising out of GST rationalisation be allowed, the statement said.

ATMA's demand comes ahead of the meeting of the GST Council, chaired by Union Finance Minister and comprising ministers from all states and UTs, on September 3 and 4, to discuss reforms proposed by the Centre that mooted most goods be charged at either 5% or 18%.