Press Information Bureau

Government of India

Ministry of Railways

28-September-2012 19:32 IST

The Ministry of Railways has made partial modification in levy of Service Tax on the fare of passengers travelling in AC Classes/First Class from 1^st October 2012.  As per the corrigendum issued by Ministry of Railways today i.e. 28.9.2012, there are following changes:

(i)  Service Tax amounting to 3.708% on the total fare of passenger services in (a) AC First Class, (b) Executive Class, (c) AC-2 tier Class, (d) AC-3 tier class, (e) AC Chair Car class, (f) AC Economy class and (g) First Class is leviable from the 1^st day of October 2012. It has been clarified that the Service Tax would be collected on the tickets issued/bookings made on or after 01.10.2012.  Service Tax is not leviable on tickets issued prior to 01.10.2012 and hence will not be collected on board the trains.

(ii)  In case of cancellation of tickets booked by the passengers on or after 01.10.2012, the applicable amount including refundable Service Tax amount will be refunded by Railways as per Railwayrefund rules and Finance Ministry guidelines. 

AKS/HK/L

Service tax on AC and First Class rail fares applies to tickets issued after the effective date; refundable on cancellation. Levy of Service Tax applies to fares for specified premium rail classes only for tickets issued or booked on or after the effective date; tickets issued prior to that date are exempt and will not be collected on board. For tickets booked on or after the effective date that are later cancelled, the railways must refund the applicable amount including the refundable service tax in accordance with railway refund rules and finance ministry guidance.