TaxTMI 
TaxTMI 
Levy of Service Tax on Transportation of Goods by Rail
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.... All SMs/Out Agents - N. F. Railway Sr.DCMs/ DCMs - KIR, LMG, APDJ, RNY, GHY & TSK; ACM- BPB DRMs- KIR, LMG, APDJ, RNY, & TSK Sr. ARMs/ARMs/AM - NJP, NBQ, BPB, RPAN, GHY. General Manager (Commercial) - All Indian Railways, General Manager (Operation) - All Indian Railways, CAO/FOIS/ NDLS, Principal Zonal Training Centre, Alipurduar Jn. AGM/CCM/COM/ PDA/ FA&CAO/CFTM/CPTM/ CVO/ CCM (PM)/L0/ S&AO/ Sr. EDPM/ Dv. COM (FOIS)/ Dy. CCM(Claims) /Dy.CCM(PM)/PO/Dy.CAO-T/SCM(CL)/ ACM(OS)/ACM (Claims) /ACM (Court)-Maligaon. Sub: Levy of Service Tax on Transportation of Goods by Rail. Please refer to this office circular of even number dated - 27.09.2012 (RG/No.47/12) regarding Levy of Service Tax on Transportation of Goods by Rail. In Supersession of the above mentioned circular, a new guideline is issued under authority of Railway Board's letter No.TCR/1078/2011/2 Dated-28.09.2012 circulated under RC No.29 of 2012 which is enclosed herewith. You are, therefore, requested initiate necessary step to implement the directives issued by the Railway Board in the Rates Circular No.29 of 2012 dated-28.09.2012 effective from 01.10.2012.(Repeat l^st October,20....
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....une 2012. List of commodities, which have been exempted from levy of Service Tax, is enclosed as Annexure-l. 2.As on date Service Tax is levied at the following rates. Service Tax 12%. Education Cess of 2% on Service Tax, Higher Education Cess of 1% on Service Tax. 3. Since an abatement of 70% has been permitted on freight for the taxable commodities, vide Notification No. 26 of 2012 Service Tax dated 20.06.2012; Service Tax will be charged on 30% of tot=J freight inclusive of all charges on goods which should be calculated as follows i) Service Tax of 12% will be charged on 30% of freight (equivalent to 3.6% on the total freight); ii) Education Cess of 2% on Service Tax will be added (equivalent to 0.072% on total freight); and iii) Higher Education Cess of 1% on Service Tax will also be added (equivalent to 0,036% on total freight); iv) Total Service Tax implication will be (») + (ii) + (iii) = 3.708% on the total freight Illustration -A: (In Rs.) Distance Kms 650 Wagon BCNA CC of Wagon Tonne 66 Rake....
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.... Charge @5% = (4*5%) Rs. 40.62 7 $Terminal Charge @ 40.00 per tonne per terminal (applicable only in Railway owned Goods Sheds/Sidings) Rs. 80.00 8 Total Freight = (4+6+7) Rs. 933.08 9 Total Freight per rake = (8*42*66) Rs. 2586497.76 10 Freight rebate under WIS scheme = (2*42*66) Rs. 204739.92 11 Total Payable Freight per rake = (9-10) Rs. 2381758.00 12 30% taxable freight of the total value 714527. 13 Add Service Tax @12% on 30% Freight (12 * 12%) Rs. 85743.00 14 Add Education Cess @2% of Service Tax (13 * 2%) Rs. 1715.00 15 Add Higher Education Cess @1% of Service Tax (13 * 1%) Rs. 858.00 16 Rounded Off Service Tax Rs. 88315.00 17 Total Rounded off Freight to be collected from one rake=(11+13+14+15) Rs. 2470073.00 Note:- $ Wherever applicable. Note:- Service tax shall be rounded off to the nearest rupee as per circular No.ST- 53/2/2003 dated 27.3.2003. 4. To facilitate correct assessment, collection and payment of Service Tax, following instructions are issued: i) FA&CAO of Zonal Railways will get themselves registered on....
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....e refunded. ix) As per Rule 6 of the Service Tax (Determination of Value) Rules 2006, "the amount realized as demurrage or by any other name whatever called for the provision of service beyond the period originally contracted or in any other manner relatable to the provision of service" is included as part of the taxable service. Accordingly, the levy of any demurrage and wharfage charges in case of transportation of goods by Rail shall attract Service Tax at the rate of 3.708%. Zonal' Railways, FOIS/CRIS are instructed to levy Ihe Service Tax @ 3.708% on the gross amount of the demurrage and wharfage charges and collect the same from the customers for the purpose of remitting to Government of india. x) It may be ensured that not only railway goods customers but also all Rail Operators such as Container Train Operators, SFTOs etc- should pay Service Tax along with haulage charge. Further, where advance payment facility on or after 01.10.2012 has been permitted they would be required to pay Service Fax along with haulage charge. Similarly, element of service tax is leviable where Weight Only' system is in vogue. It may be ensured that proper arrangement be made for up-ke....
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....l come into force w.e.f. 01.10.2012. This issues in consultation with Finance Directorate of Ministry of Railways. D.A / As above. (Sattjay Kumar Jha) Dy. Director, Traffic Commercial (Rates) Railway Board No: TCR/1078/2011/2 New Delhi, 28.09.2012 Copy for information: - 1. FA & CAOs, All Indian Railways. 2. Deputy Comptroller and Auditor Genera! of India (Railways), New Delhi. For Financial Commissioner (Railways) No: TCR/1078/2011/2 New Delhi, 28.09.2012 1. Chief Commercial Managers, All Indian Railways. 2. Chief Operating Managers, All Indian Railways. 3. Managing Director, CRJS, Chanakya Puri, New Delhi-23. 4. The Chief Administrative Officer, FOIS, Northern Railway, Camp: CRIS, Chanakya Puri, New Delhi-23. 5. Managing Director, Konkan Railway Corporation, Belapur Bhavan, Sector- II, CBD Belapur, New Mumbai-400614. 6. Director General, Railway Staff College. Vadodara. 7. Director, Institute of Rail Transport Management (1RITEM), Manaknagar, Lucknow. 8. GS/1RCA, New Delhi: for necessary action. (Sanjay Kumar Jha) Dy. Director, Traffic ....