Prices of small cars and two-wheelers up to 350 cc are set to drop as the GST Council approved a sweeping restructuring of the tax regime on Wednesday.

Effective September 22, the first day of Navaratri, GST slabs will be streamlined to 5% and 18%. Petrol, LPG, and CNG vehicles under 1,200 cc (up to 4,000 mm in length) and diesel vehicles up to 1,500 cc will now attract 18% GST, down from the earlier 28%, offering significant relief to buyers of compact cars and bikes.