Retreading of Tyre is treated as Supply of Service under GST.

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Retreading of Tyre is treated as Supply of Service under GST.

Source : 

Circular No. 34/8/2018-GST

Issue:

Whether retreading of tyres is a supply of goods or services?

Clarification

In retreading of tyres, which is a composite supply, the pre-dominant element is the process of retreading which is a supply of service. Rubber used for retreading is an ancillary supply. Which part of a composite supply is the principal supply, must be determined keeping in view the nature of the supply involved. Value may be one of the guiding factors in this determination, but not the sole factor. The primary question that should be asked is what is the essential nature of the composite supply and which element of the supply imparts that essential nature to the composite supply.

Supply of retreaded tyres, where the old tyres belong to the supplier of retreaded tyres, is a supply of goods (retreaded tyres under heading 4012 of the Customs Tariff attracting GST @ 28%).

 

Video to Explain - Tyre Retreading Process 

ST Circular on Application of Service Tax on Tyre Retreading Activity - clarification regarding;