Ceat reduces tyre prices to pass on GST cut benefit

Tyre manufacturer Ceat Ltd has announced a price cut across its entire range of tyres to pass on the benefits of the GST rate reduction to the consumers. The tyre manufacturer has stated that it will be passing on 100 per cent of the GST benefits to their channel and customers as GST on the new pneumatic tyres has been reduced to 18 per cent from 28 per cent, under the GST 2.0 regime. While all the tyres will be taxed at 18 per cent, effective from September 22, the tractor tyres and tubes will attract a reduced GST rate of five per cent.

Speaking about this move, Ceat's Managing Director and CEO Arnab Banerjee said that the reduced GST slabs will greatly benefit the tyre industry and consumers alike. "Not only will it lower the cost of owning and operating a vehicle for customers across various segments, but by making tyres more affordable to replace, it will also make our roads safer," he said. Banerjee further said, "All in all, the move will spur formalisation and greater compliance, while also fostering sustainable growth in the sector."

The GST Council, earlier this month, announced the introduction of the GST 2.0 regime, under which tax rates for several goods and services have been reduced from the GST 1.0 regime. The passenger vehicles have become cheaper than before, with the rate reduction. In the two-wheeler segment too, GST has been reduced to 18 per cent from 28 per cent for the models with engines of up to 350 cc, while the bigger engine-powered two-wheelers will draw 40 per cent tax. The revised tax rates will be effective from September 22. All the automakers in India have already announced price cuts across their range of automobiles, which will be effective from September 22.

The GST rate cut will not only benefit the auto OEMs, but the component manufacturers as well. The tyre companies too, will see a benefit in this move. Ceat's price reduction comes as a part of that.

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