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Rail clears air on AC fare hike

New Delhi, Sept. 28 (PTI): Rail passengers travelling AC in October will not pay any service tax if they purchase their tickets by the end of this month.

Fares of AC first class, AC 2-tier, AC 3-tier and AC chair car will go up 3.7 per cent from October 1 with the service tax imposed on these facilities.

“However, service tax will not be levied on tickets issued prior to October 1, and it will not be collected on board and the railways have modified its earlier order on it,” said a senior railway ministry official.

The earlier order stated that the service tax will apply to tickets issued in advance for journeys to commence on or after the date of its implementation. “In case of tickets already issued excluding service tax, it will be ensured that the same is recovered either by TTEs in the train or by the booking offices before commencement of journey,” the earlier notification issued by the railways said.

The official said, “Since service tax is leviable from October 1, it will be collected on the tickets issued on or after that date.”

In case of cancellation of tickets, service tax will be refunded by the railways, the official said.

Besides AC fares, the railways is levying service tax on freight and auxiliary service such as catering and parking at stations.

The service tax is 12.36 per cent, but after adjustment of 70 per cent of this, it will effectively be 3.708 per cent on passenger fares in AC classes and freight services.

 
 
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