Looking for expert help with Tyre retreading GST rate and HSN code? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Retreading a customer's tyre is a service at 18% GST (CBIC Circular 34/8/2018-GST; Notification 11/2017-CT(R) S. No. 26 as substituted by 15/2025-CT(R)).
- Selling retreaded tyres made on your own casings is a sale of goods under HSN 4012, also 18% from 22 September 2025 (Notification 9/2025-CT(R), Schedule II, S. No. 138). The old 28% is gone.
- Tread rubber, compounded rubber and curing machinery all carry 18% GST, so a regular-scheme unit can usually set most of its input tax against its output.
- Register above Rs 20 lakh. The Rs 40 lakh goods limit doesn't help a job retreader, and the composition option is the 6% services scheme up to Rs 50 lakh.
- For income tax, Section 44AD (Section 58 from 1 April 2026) covers turnover up to Rs 2 crore or Rs 3 crore. Fleet customers may deduct 1% or 2% TDS under Section 194C.
What is the GST rate and HSN code for tyre retreading? Retreading a customer's tyre is a supply of service taxed at 18% (9% CGST plus 9% SGST) under Notification 11/2017-Central Tax (Rate), serial number 26, from 22 September 2025. Retreaded tyres you sell from your own casings fall under HSN 4012 at 18% under Schedule II of Notification 9/2025-Central Tax (Rate).
A retreading shop on a highway does two kinds of business. A transporter drops off twelve worn truck tyres, you buff, build and cure them, and the driver collects them three days later. In the same week, you sell a few retreaded tyres you made on casings bought from scrap dealers. GST treats these two jobs differently, even though the rate now comes out the same. The difference still decides your registration limit, your composition option and what you print on the invoice. This post covers both, plus income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the Income-tax Act 2025 sections that apply from 1 April 2026. It's for owners of retreading units (precure and hot cure) and the CAs who file for them.
Whose tyre is it? That decides goods or service
CBIC answered this in Circular 34/8/2018-GST (1 March 2018). Retreading is a composite supply. When the customer owns the old tyre, the principal supply is the retreading process, which is a service, and the rubber you use is ancillary. When the old tyre belongs to you and you sell the retreaded tyre, that's a supply of goods under heading 4012.
The service side fits heading 9988, services on goods owned by others. CBIC's Explanatory Notes to the services classification list "rebuilt and retreaded tyres" as excluded from motor vehicle repair (998714), and code 998851 covers rubber product manufacturing services. Under serial number 26 of Notification 11/2017-Central Tax (Rate), as substituted by Notification 15/2025-Central Tax (Rate) from 22 September 2025, job work not listed elsewhere (item iv) and any other treatment or process on goods belonging to another person (item vii) are both 9% CGST. So it's 18% whether your customer is a registered transporter or a farmer with one tractor tyre. Retreading isn't in the 5% job work list, which covers food, textiles, printing, bricks and a few other goods.
Example: a transport company sends 10 truck tyres for retreading at Rs 4,500 each. Your bill is Rs 45,000 plus 18% GST of Rs 8,100 (Rs 4,050 CGST plus Rs 4,050 SGST), so Rs 53,100. Separately, you sell one retreaded tyre made on a casing you bought for Rs 2,000 from a scrap dealer, at Rs 7,500. GST is 18% of Rs 7,500, so Rs 1,350, and the bill is Rs 8,850. The scrap dealer charged no GST, so there's no credit on that casing.
GST rates on what you buy and sell
Comparison
GST for a Retreading Unit (from 22 September 2025)
| Item (HSN or heading) | GST | Notification entry |
|---|---|---|
| Retreading a customer's tyre (9988) | 18% | 11/2017-CT(R), S. No. 26, items (iv)/(vii), as substituted by 15/2025-CT(R) |
| Retreaded or used tyres, tyre treads, tyre flaps (4012) | 18% | 9/2025-CT(R), Sch II, S. No. 138 |
| Tread rubber in unvulcanised forms and profiles (4006) | 18% | 9/2025-CT(R), Sch II, S. No. 132 |
| Compounded rubber, unvulcanised (4005) | 18% | 9/2025-CT(R), Sch II, S. No. 131 |
| Curing and other rubber working machinery (8477) | 18% | 9/2025-CT(R), Sch II, S. No. 462 |
| Rubber waste, parings and scrap (4004 00 00) | 5% | 9/2025-CT(R), Sch I, S. No. 267 |
| Rubber powders and granules from waste (4004) | 18% | 9/2025-CT(R), Sch II, S. No. 130 |
Source: CBIC Notifications 9/2025-CT(R) and 15/2025-CT(R) (17 September 2025, in force 22 September 2025); Circular 34/8/2018-GST
Inside your State, 18% is billed as 9% CGST plus 9% SGST. A customer in another State pays 18% IGST.
Three points to watch. First, Circular 34/8/2018-GST says 4012 attracts 28%, because that was the rate in 2018. If your billing software still carries 28% for retreaded tyres, fix it; it has been 18% since 22 September 2025. Second, new tractor tyres are 5% (Schedule I, S. No. 269 and 271), but those entries cover heading 4011 only. A retreaded tractor tyre you sell is 4012 at 18%, and retreading a farmer's tractor tyre is the 18% service. Third, if you sell buffing waste, the rate depends on what it is: waste and scrap of rubber is 5%, but powder and granules are 18%. Get the classification of your buffing dust confirmed before you bill it at 5%.
Because your main inputs carry the same 18% as your output, a regular-scheme unit can usually set most of its purchase GST against its sales GST. Say you buy Rs 1,20,000 of tread rubber and compound in a month: that's Rs 21,600 of credit against your output tax.
Registration and composition for retreaders
When to register. Section 22(1) of the CGST Act sets the limit at Rs 20 lakh of aggregate turnover in a financial year (Rs 10 lakh in special category States). Notification 10/2019-Central Tax raises it to Rs 40 lakh only for persons engaged exclusively in supplying goods. Job retreading is a service, so almost every retreading shop registers above Rs 20 lakh. And in Telangana the Rs 40 lakh limit doesn't apply even to goods-only sellers, because Notification 10/2019 leaves out intra-State suppliers there. Our registration limit guide lists the States, and our GST registration service files the application.
Composition. The regular composition scheme under Section 10(1) is built for goods. It lets you supply services only up to 10% of last year's turnover in the State or Rs 5 lakh, whichever is higher. A shop that mostly retreads customers' tyres is past that. Section 10(2A) is the route for a supplier who isn't eligible under Section 10(1): if your aggregate turnover in the preceding financial year was up to Rs 50 lakh, you can pay 3% CGST plus 3% SGST on all your outward supplies under Notification 2/2019-Central Tax (Rate). The conditions in that notification matter:
- You can't charge GST to customers or claim any input tax credit, and you issue a bill of supply instead of a tax invoice.
- No inter-State outward supplies.
- The bill of supply must carry the line "taxable person paying tax in terms of notification No. 2/2019-Central Tax (Rate) dated 07.03.2019, not eligible to collect tax on supplies".
Run the numbers before opting in. On Rs 3,00,000 of monthly sales, composition costs you 6%, which is Rs 18,000, and you lose the credit on tread rubber. On the regular scheme, output tax is Rs 54,000 and, with Rs 21,600 of credit, you pay Rs 32,400 in cash. Composition pays less tax, but your fleet customers who claim input credit lose the credit on your bills, and some won't buy from a composition supplier. Our composition scheme guide compares both routes.
Step-by-Step Guide
Monthly GST Routine for a Retreading Unit
Log every tyre against its owner
Record whether each casing came from a customer (job retreading, service) or from your own stock (sale of goods under 4012). The job card decides the line on the invoice.
Bill each line correctly
Retreading charges under heading 9988 at 18%; own retreaded tyres under HSN 4012 at 18%. Don't use 28% from the 2018 circular.
Claim credit on inputs
Tread rubber, compound, curing envelopes and machinery carry 18% GST. Check each supplier invoice appears in GSTR-2B before you claim it.
Keep casing purchases documented
Casings from unregistered scrap dealers carry no GST and no credit, but keep a purchase record for each lot so your stock ties up.
File GSTR-1 and GSTR-3B
Report service and goods lines under their own codes in GSTR-1 so the tax matches what you pay in GSTR-3B.
Source: CBIC Circular 34/8/2018-GST; Notifications 9/2025-CT(R) and 15/2025-CT(R)
Income tax: 44AD, TDS from fleets and cash for casings
Section 44AD. For FY 2025-26, a resident individual, HUF or partnership firm (not an LLP) can declare 6% of turnover received by bank transfer, UPI or account payee cheque (by the return due date) and 8% of the rest as profit, under Section 44AD of the Income-tax Act 1961. The limit is turnover of Rs 2 crore, or Rs 3 crore if cash receipts are within 5% of turnover. From 1 April 2026 the same scheme is Section 58 of the Income-tax Act 2025, with the same rates and limits.
Example: a proprietor's retreading unit has turnover of Rs 60,00,000 in FY 2025-26: Rs 48,00,000 by bank and UPI from fleet customers and Rs 12,00,000 in cash from walk-in truck drivers. Cash is 20% of turnover, so the limit is Rs 2 crore, and Rs 60 lakh is within it. Deemed profit is 6% of Rs 48,00,000 (Rs 2,88,000) plus 8% of Rs 12,00,000 (Rs 96,000), so Rs 3,84,000. A curing chamber, a buffing machine and a compressor bring real depreciation, so check with your CA whether books show a lower profit. Our Section 44AD guide covers the five-year lock-in if you later opt out.
TDS on your bills. Many company and firm customers treat a retreading job as a contract for work and deduct TDS under Section 194C of the 1961 Act: 1% if you're an individual or HUF, 2% if you're a firm or company. It applies once a single bill exceeds Rs 30,000 or the year's bills from that customer exceed Rs 1,00,000. On the Rs 45,000 retreading charge in the example above, a company customer would deduct 1% (Rs 450) from a proprietor. From 1 April 2026 this is Section 393(1), Table Sl. No. 6(i), of the Income-tax Act 2025, with the same rates and limits. Match every deduction with Form 26AS before you file. Our Section 194C guide has the details.
Cash paid for casings. If you keep books and claim actual expenses, a payment above Rs 10,000 in cash to one person in a day isn't allowed as a deduction (Section 40A(3) of the 1961 Act; Section 36(4) of the 2025 Act). Buying a lot of 10 casings at Rs 2,000 each from one truck owner in cash is Rs 20,000, and the whole expense is disallowed. Pay by UPI or bank transfer instead. See our cash transaction limits guide.
Common mistakes in retreading units
- Billing 4012 at 28%. That rate went on 22 September 2025. Retreaded tyres and job retreading are both 18%.
- Treating job retreading as a sale of goods. The customer's tyre stays the customer's. You're selling a service, which changes your registration limit and your composition route.
- Waiting for Rs 40 lakh to register. A shop doing job retreading registers above Rs 20 lakh.
- Taking the 1% goods composition rate. Job retreading above the 10% or Rs 5 lakh services allowance rules out Section 10(1); the option is 6% under Section 10(2A).
- Ignoring TDS in Form 26AS. Fleet customers deduct 1% or 2%; if you don't claim it, you pay the tax twice.
- Paying cash for casing lots. Above Rs 10,000 to one seller in a day, the expense is disallowed if you're on books.
How Tax Garden helps retreading units
We start with your job cards, because whether a tyre was the customer's or yours decides how each line is billed. We register you, set up separate codes for job retreading and own-casing sales, check the 6% composition numbers against the regular scheme on your actual sales mix, and file GSTR-1 and GSTR-3B through our GST return filing service. At year end we reconcile 194C TDS from fleet customers with Form 26AS, test 44AD against your books and file your ITR through our ITR filing service. Call or WhatsApp us on 9640290977.
Related reading: GST and income tax for auto spare parts and tyre shops, income tax for truck owners and transporters, who are your main customers, and GST on goods transport and GTA reverse charge.
