India Cuts Tyre GST to 18%; Tractor & Bicycle Tyres at 5%

India will cut the GST on new pneumatic tyres to 18% and reduce tractor tyres, tubes and bicycle tyres to 5%, with effect from 22 September 2025. The decision follows recommendations made at the GST Council’s 56th meeting on 3 September and sits within a two-slab reform aiming to simplify rates and spur consumption. Tyre makers say prices will be lowered to reflect the new structure.

What changes on 22 September 2025

• New pneumatic tyres (cars, motorcycles, buses, trucks): 28% → 18%.
• Rear tractor tyres and tubes / tractor tyres & tubes: 5% under the merit slab.
• Bicycle and other non-motorised categories: move to the 5% slab.
  The GST Council’s annexures list “new pneumatic tyres” (excluding bicycles, cycle-rickshaws, rear tractor tyres and aircraft) in the 28%→18% bucket, and tractor tyres/tubes in the 18%→5% bucket; bicycles are separately moved to 5% in the broader rationalisation.

Industry response

CEAT confirmed it will pass through the lower tyre GST to customers and dealers. As CEAT Managing Director & CEO Arnab Banerjee said: “We expect sales of commuter motorcycles to go up in semi-urban and rural households, and farm sales also could go up.”
Indian auto media also report CEAT price cuts across commercial, agri, passenger and two-wheeler lines in step with GST 2.0.

Why it matters for the trade

Lower India tyre GST directly reduces replacement prices, especially in price-sensitive segments such as commuter motorcycles and farm machinery. Analysts and OEMs expect enquiry uplifts and incremental unit demand as prices reset in the festive period.

Context from recent Tyre News coverage

• CEAT has been investing in capacity, including a Chennai PCUV uplift announced in August 2025 — relevant as lower tyre GST supports utilisation. Read more: CEAT Chennai capacity expansion (Tyre News). tyrenews.co.uk
• Export dynamics remain live: India–US trade frictions included higher US duties on Indian tyres from late August 2025, which may offset some benefits for exporters. Read more: US doubles tariffs on Indian imports; tyres hit (Tyre News). tyrenews.co.uk

Old vs New GST on Tyres (India)

What retailers and fleets should do next

• Update point-of-sale and invoicing to reflect the India tyre GST change from 22 September.
• Reprice open quotes and service packages, especially for agri and commuter two-wheeler tyres.
• Coordinate with suppliers on price list revisions and dealer incentives tied to the post-GST baseline.

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