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Like most other goods, GST is also levied on tyres, which are an essential component of the mobility and automobile sector. Read on to know more about the applicable rate of GST on tyres and how it is calculated.  

What is the Applicability of GST on Tyres

The sale of tyres, whether of bicycles, bikes, cars or buses, is taxed under the Goods and Services Tax (GST) regime. The GST Council of India decides on what tax rates must be applicable to a particular product, including tyres. 

 

The GST rate on tyres belongs to different tax slabs, so GST rates on these products range from 5% to 28%. Have a look at the following table to check the applicable rates of GST on tyre purchase belonging to different categories:

Description

GST Rate

Pneumatic tyres or inner tyre tubes used in bicycles, rickshaws and three-wheeler rickshaws

5%

Tubes for tyres

18%

New pneumatic (air/gas) rubber tyres used in motor cars, buses, motor cycles, lorries, etc

28%

Retreaded Tyres

18%

Note: The GST Council reduced the GST rate on retreaded or used tyres to 18% from the earlier rate of 28% in 2019. 

What is the Impact of GST on Tyres?

Before this new indirect tax regime was enacted, a number of central and state government taxes were levied on the purchase of tyres. 

 

For instance, many states charged a Value Added Tax or VAT of 12.5% on rubber tyres. Because of multiple taxes, the total taxable amount was as high as 31% of the product’s cost. Moreover, the taxation on tyre tubes amounted to 20%. 

 

However, since the implementation of the GST, these tax rates for tyres have come down. The applicable GST rate on the inner tyre tubes used in bicycles and rickshaws is 5%. 

 

On the other hand, the tyre GST rate for motorcycles, cars, etc. and retreaded tyres are 28% and 18%, respectively. Moreover, tubes for tyres attract a GST rate of 18%. Check the following table to see how GST has impacted costs of pneumatic tyres for a car:

Description

Pre-GST Rate

Post-GST Rate

Base Price

₹5,000

₹5,000

VAT@12.5%

₹625

-

Other Taxes @18.5%

₹925

-

GST @28%

-

₹1,400

Final Price

₹6,550

₹6,400

So, the GST has reduced the total amount you have to pay when you buy a pneumatic tyre. Moreover, it has simplified and streamlined taxation and improved transparency.

GST Rate and HSN code for Tyres

Harmonised System of Nomenclature (HSN) is a systematic classification method for products under the GST regime. Chapter 40 of the HSN code consists of these codes for rubber articles, including automobile tyres. 

 

Here is a comprehensive list of HSN code of different categories of tyres and the applicable GST rates:

Products Description

HSN Codes

Rates (%)

Forms (for example, rods, tubes and profile shapes) and articles (for example, discs and rings), of unvulcanised rubber

4006

9%

Tubes, pipes and hoses, of vulcanised rubber other than hard rubber, with or without their fittings (for example, joints, elbows, flanges)

4009

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%

New pneumatic tyres, of rubber of a kind used on aircraft

40113000

2.5%

Rear Tractor tyres and rear tractor tyre tubes (inserted w.e.f. 14/11/2017) and of a kind used on aircraft)

4011

9%

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%

Re-treaded or used tyres and flaps

4012

9%

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%

Tube for tractor tyres

4013 90 49

9%

Tyre for tractors

4011 70 00

9%

How to Calculate GST on Tyres

Now that you know about the applicable tyre GST rates, let us see how you can calculate GST on tyres. 

 

As per the GST rules, a 28% tax is charged on pneumatic tyres for cars, bikes, etc. So, the GST that you will have to pay when purchasing such a tyre would be 28% of the base price. 

 

In case you are purchasing a tyre for a bicycle or rickshaw, the applicable GST rate is 5%. On the other hand, the tax rate for tyres for agricultural vehicles, like tractors, is 18%. The tubes for all tyres are taxed at a similar rate. 

E-way Bill Requirement for Tyres

As per the GST Rules, if suppliers or agents transport any consignment of tyres worth more than ₹50,000, they are required to generate an e-way bill. The e-way bill must contain these two parts. Part A must provide the following details: 

  • Recipient GSTIN

  • Delivery destination

  • Invoice number along with the date

  • HSN code of the tyres

  • The value of the consignment

  • Transport document number 

  • Reasons for transportation

     

On the other hand, Part B must have the following details:

  • Vehicle number 

  • Transporter ID

Input Tax Credit Availability on Tyres

Section 17(5)(ab) of the CGST Act disallowed Input Tax Credit (ITC) on various items, including motor vehicles. So, you can not claim ITC on tyres. However, since the purchase of trucks does not come under clause (a) or (aa) of this section, you can avail ITC on truck tyres. 

 

The automobile sector in India is slowly recovering from the damage done by the 2019 pandemic. The Government of India is also providing solutions to revive the industry. As such, experts are hopeful that the GST council revisits the GST on tyres to boost the industry further

FAQs for GST on Tyres

What is the GST rate for tubeless tyres?

The GST for all pneumatic tyres is 28% which includes tubeless tyres.

Can we claim GST on car tyres?

Yes, the GST on car tyres is 28%, which you are allowed to claim.

What is the GST on Retreaded Tyres?

The GST for retreaded tyres is 18%. In 2019, the GST Council decided to reduce it from 28% to the current rate.

What is the GST Rate for Tyres in India?

The GST for tyre purchase in India ranges between 5%-28%. For bicycle and rickshaw tyres, it is 5% and 18% for tractor tyres. Moreover, GST on bike tyres and car tyres are pegged at 28%.

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