New Delhi, Sep 12 Indian tyre company CEAT Limited on Friday announced price reduction across its entire range of tyres to pass on the benefits of the recent Goods and Services Tax (GST) reforms.
The company will pass on 100 per cent of the GST benefits to their channel and customers, a release from the company said.
The reduced prices, reflecting the new GST rates, will be applicable to all CEAT products effective from September 22.
The GST on new pneumatic tyres has been reduced to 18 per cent from 28 per cent, while tractor tyres and tubes will attract a reduced GST rate of five per cent.
Arnab Banerjee, Managing Director and CEO, CEAT Limited, called the GST rationalisation a timely and progressive decision.
"The reduced GST slabs will greatly benefit the tyre industry and consumers alike. It will lower the cost of owning and operating a vehicle for customers across various segments and make tyres more affordable to replace," Banerjee said.
The timely replacement of tyres will also make our roads safer, he said, adding that the move will spur formalisation and greater compliance, while fostering sustainable growth in the sector.
The domestic tyre industry is expected to grow by 7-8 per cent this fiscal year, on the back of replacement demand, according to industry sources. The replacement demand will likely be supported by factors like favourable rural sentiments, festive demand, and the expected rate cut's effect on consumption, even as urban demand is soft.
The growth is also driven by consistent investments in capacity expansion, improved manufacturing efficiency, and a stronger focus on R&D capabilities.
India’s GST reforms are expected to trim headline inflation by as much as 75 basis points and unlock up to Rs 1 lakh crore in consumption spending.
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