GST Revamp: Lower Rates to Make Small Cars, Bikes More Affordable

### Rapid summary
– The GST Council approved restructuring the Goods and Services Tax (GST) system on September 3, 2025.
– Effective September 22, GST slabs will be cut to two tiers: 5% and 18%, with select items under a special slab of 40%.
– Petrol, LPG, CNG vehicles (<1,200 cc) and diesel vehicles (<1,500 cc) are moved to an 18% GST rate from the previous 28%.- Motorcycles up to 350 cc will also see reduced taxation at an 18% rate instead of the earlier slab of 28%.- Automobiles above specified dimensions or capacities (e.g., >1,200 cc engines and motorcycles above >350cc) will incur a higher levy at a special slab of up to 40%.- Small hybrid cars benefit from lower rates; electric vehicles remain taxed at the lowest rate-5%.
– Auto parts now uniformly fall under an improved GST slab of ​​18%, down from the former structure.
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