Taxation

GST on tyres in India

May 6, 2026

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The rollout of India's Goods and Services Tax (GST) system has altered the taxation of various products and services nationwide. Tyres, which form a crucial part of the automotive sector, underwent notable changes under this new tax structure. The introduction of GST brought tyre taxation under a unified indirect tax system, replacing multiple pre‑GST levies. Under GST, tyres are classified based on use and category, with different rates applicable depending on the type of tyre. for luxury or sin goods.

Read on to learn about the specifics of GST on tyres, including applicable tax rates, and how GST affects tyre manufacturers and sellers.

What is the GST on tyres?

Before the GST came into effect, tyre manufacturers had to deal with multiple tax components, including excise duty, VAT (value-added tax), and various state-specific taxes. This created a complex web of tax calculations and increased paperwork for companies and dealers. The shift to GST consolidated these separate taxes into one unified system.

The current GST framework categorises tyres into different tax brackets based on their category and intended use. India's GST Council, an entity that makes decisions about GST matters, has sorted tyres into specific groups. Each group comes with its own HSN (Harmonised System of Nomenclature) code and corresponding GST rates.

From‍‌‍‍‌‍‌‍‍‌ 22 September 2025, the 2.0 GST reforms brought about the simplification of the tax structure that was initially based on five slabs and is now mainly three rates: 5% (merit goods), 18% (standard goods), and 40% (luxury/sin ‍‌‍‍‌‍‌‍‍‌goods).

Let's understand the tyre GST rate and HSN codes.

GST rate and HSN code for tyres

Different types of tyres attract varying GST rates. The table below provides a breakdown of the tyre GST rates and HSN codes for each category:

Products Description	HSN Codes	Rates (%)	GST 2.0 Rate (%)
Forms (for example, rods, tubes and profile shapes) and articles (for example, discs and rings), of unvulcanised rubber	4006	9%	9%
Tubes, pipes and hoses, of vulcanised rubber other than hard rubber, with or without their fittings (for example, joints, elbows, flanges)	4009	9%	9%
Pneumatic tyres or inner tubes, of rubber, of a kind used on/in bicycles, cycle-rickshaws and three-wheeled powered cycle rickshaws	4011	2.5%	5%
New pneumatic tyres, of rubber of the type used on aircraft	40113000	2.5%	5%
Rear Tractor tyres and rear tractor tyre tubes (inserted w.e.f. 14/11/2017) and of the kind used on aircraft)	4011	9%	5%
New pneumatic tyres, of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three-wheeled powered cycle rickshaws; and Rear Tractor tyres and of kind used on aircraft]	4011	14%	18%
Re-treaded or used tyres and flaps	4012	9%	18%
Inner tubes of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three-wheeled powered cycle rickshaws; and Rear Tractor tyre tubes]	4013	9%	18%
Tube for tractor tyres	4013 90 49	9%	5%
Tyre for tractors	4011 70 00	9%	5%

The key adjustments are:

New pneumatic tyres for automobiles, motorcycles, lorries, and buses are now taxed at 18% GST, down from the old 28%. That's a significant cut.
Farmers also benefit—tractor tyres and tubes are now taxed at 5%, a drop from the earlier band of 9–18%.
Bicycle and aircraft tyres have also been included as merit goods and are taxed at 5%.
Retreaded tyres stay at 18%, so no adjustment there.

Input tax credit (ITC) for tyres

GST's input tax credit (ITC) system enables businesses to claim back the tax they've paid when purchasing materials or services. But claiming ITC on tyres comes with specific conditions.

Please note that only businesses registered under GST are eligible to claim Input Tax Credit (ITC). The tyres must also serve business purposes. Personal vehicles don't qualify for tyre-related ITC claims. Additionally, taxi drivers working with platforms like Ola or Uber can't claim ITC on tyres since they don't directly collect GST from passengers.

Axis Bank provides GST payment options for both individual and business customers. You can pay through net banking, NEFT/RTGS, or at any of its branches. The bank's GST payment services include:

Simple online payments via the Axis Bank Internet Banking Portal.
Protected payment gateway ensuring smooth transactions.
Quick payment confirmations with challan generation.
Support staff are available to assist with GST payment inquiries.
Direct connection to the GST portal for tax filing and payments.

Utilising Axis Bank's GST services enables businesses to manage their tax obligations efficiently, including the timely payment of GST on tyres and other items.

Also Read - How does GST affect the real estate sector?

Impact of GST on the tyre industry

The implementation of GST 2.0 in September 2025 brought significant changes to India's tyre sector. Let's examine what this means for various stakeholders.

Buyers now see more explicit pricing thanks to uniform tax rates across states. The more straightforward tax structure makes it easier to understand the final cost of tyres.

For tyre manufacturers, single-rate taxation reduced accounting complications and simplified tax compliance. They receive tax credits more quickly, which helps improve their cash flow. The end of state-specific tax benefits means they can set up factories anywhere without worrying about tax disadvantages.

Tyre dealers and sellers benefit from claiming ITC on their stock purchases. This reduces their overall tax burden and helps improve their profit margins.

Conclusion

Overall, GST 2.0 revolutionised tyre taxation in India, cutting rates for the majority of new pneumatic tyres and making the process easier for the entire industry. The more straightforward tax structure with primarily three main rates (5%, 18%, and 40%) makes it easier to understand the prices of tyres. Both manufacturers and sellers benefit from easier compliance and quicker tax credit processing.

The tyre industry is constantly evolving, making it essential for everyone involved to stay up-to-date with GST rule updates. Understanding GST on tyres and utilising Input Tax Credit (ITC) effectively can help you run your business smoothly and also support industry growth.

Frequently Asked Questions

Is there GST on retreaded tyres?

Retreaded tyres are subject to an 18% GST rate. GST on tyres applies to any second-hand, used, or recycled tyres that have gone through retreading.

How much GST is on waste tyres?

Waste tyres attract 18% GST. This tyre GST rate covers both the disposal and recycling of such tyres.

Disclaimer:This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article

Tax and GST regulations are subject to change. The information in this article is based on applicable laws, rules, notifications, and interpretations in force as on the date of publication and may change due to amendments, judicial decisions, or regulatory updates.