Shares of tyre-makers rose up to 6 per cent in Tuesday's trading session amid hopes that the proposed goods and services tax (GST) reforms could extend to these companies after the Automotive Tyre Manufacturers Association (ATMA) urged the government to consider the same.

JK Tyre & Industries share price jumped nearly 6 per cent, emerging as the top gainer. Meanwhile, MRF and CEAT shares were trading 5 per cent higher.

Other tyre stocks like Apollo Tyres, Tolins Tyre and Balkrishna Industries also surged more than 4 per cent during the intraday session today.

GST reforms on tyres

The ATMA on Monday urged the government to reduce the GST rate on automotive tyres from the current 28 per cent to 5 per cent, emphasising that tyres should not be classified as luxury goods due to their significant cost impact on key sectors like transportation, agriculture, mining, and construction.

At present, most categories of automotive tyres fall under the 28 per cent GST slab, the highest tax bracket, while tractor tyres and aircraft tyres are taxed at 18 per cent and 5 per cent, respectively, ATMA said in a statement.

The association highlighted that in sectors such as transportation, agriculture, mining, and construction—where tyres account for a major share of operating expenses—a lower GST rate of 5 per cent would ease financial pressure on small traders, farmers, and businesses dependent on affordable transport.

ATMA further said that reducing GST on tyres would directly lower vehicle operating expenses, cut logistics costs, and extend substantial benefits to farmers, small enterprises, service providers, and industries such as infrastructure and mining.

"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," ATMA Chairman Arun Mammen was quoted as saying PTI.

ATMA's request comes ahead of the GST Council meeting, chaired by the Union Finance Minister and including ministers from all states and union territories, scheduled for September 3 and 4, where proposed reforms by the Centre—suggesting most goods be taxed at either 5 per cent or 18 per cent—will be discussed.

"This rise is entirely speculative, as the Automotive Tyre Manufacturers Association (ATMA) has demanded that the Government of India (GoI) reduce the Goods and Services Tax (GST) on tyres from 28% to 5%. ATMA's lobbying has fueled hope for a GST rate cut. However, the GoI's response to the ATMA demand is awaited," said Avinash Gorakshkar, SEBI-registered fundamental research analyst.

(With inputs from PTI)

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