Apollo Tyres, MRF soar up to 5% on GST cut hopes

Share prices of tyre stocks surged over 5% after the Automotive Tyre Manufacturers Association (ATMA) urged the government to lower GST rates on tyres. ATMA, which represents India’s six largest tyre companies accounting for over 90% of tyre production, has asked the government not to treat tyres on par with luxury goods, arguing that they are critical to sectors such as agriculture, logistics, and infrastructure.

Currently, all automotive tyre categories are taxed at 28%, while tractor tyres and aircraft tyres attract GST of 18% and 5%, respectively. The industry body has recommended a uniform 5% GST across all categories, which it said would significantly ease cost pressures in transportation, agriculture, mining, and construction.

At the time of reporting, Apollo Tyres was up nearly 5% at ₹490.85, MRF Tyres rose 5.79% to ₹1,53,220.00, and JK Tyre gained 6% to ₹352. Over the past five sessions, JK Tyre has surged 10%, while Apollo Tyres and MRF have risen 8%.

“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,” said Arun Mammen, Chairman, ATMA.

ATMA also cautioned that delaying GST rate revisions could lead to tyre dealers accumulating unutilised input tax credit (ITC). To ease working capital pressures, it has urged the government to promptly announce revised rates and allow a one-time refund of unused ITC.

The request comes just ahead of the GST Council meeting scheduled for September 3and 4, where reforms are expected to be discussed. Markets have been reflecting optimism in the run-up to the meeting, with investors hoping that GST rationalisation will boost consumption.