Levy of Service Tax on Railway Passengers Travelling in AC Classes/First Class from 1-10-2012

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 1st October, 2012. As per the corrigendum issued by Ministry of Railways on 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

(g) First Class

is leviable from the 1st day of October, 2012. It has been clarified that the Service Tax would be collected on the tickets issued/bookings made on or after 1-10-2012. Service Tax is not levieble on tickets issued prior to 1-10-2012 and hence will not be collected on board the trains.

(ii) In case of cancellation of tickets booked by the passengers on or after 1-10-2012, the applicable amount including refundable Service Tax amount will be refunded by Railways as per Railway refund rules and Finance Ministry guidelines.