In compliance of the provisions contained in Finance Bill-2012 and subsequent notifications issued by Ministry of Finance, the Service Tax in case of rail travel, which was exempted up to 30th September 2012, will be levied on the fare of passenger services in the following classes from 1st October 2012.
(i) AC First Class, (ii) Executive Class, (iii) AC-2 Tier Class, (iv) AC-3 Tier class, (v) AC Chair Car class, (vi) AC Economy Class and (vii) First Class.
Since an abatement of 70% has been permitted on passenger services by Ministry of Finance, the Service Tax will be charged on 30% of total fare including reservation charge, development charge, superfast surcharge which would be calculated as follows:-
i)Service Tax of 12% will be charged on 30% of fare (equivalent to 3.6% on the total fare)
ii)Education Cess of 2% on Service Tax will be added (equivalent to 0.072% on total fare)
iii)Higher Education Cess of 1% on Service Tax will also be added (equivalent to 0.036%
on total fare)
iv)Total Service Tax implication will be (i) + (ii) + (iii) =3.708% on the total fare.
On Concessional value tickets / Privilege Ticket Order tickets etc. service charge will be levied on 30% of the total fare actually being paid by the passengers.
The Service Tax will also apply to tickets issued in advance for journeys commencing on or after 01stOctober 2012. In case of tickets already issued in advance excluding service tax, the service tax on total fare including development charge, superfast surcharge, reservation fee, etc for the journeys commencing from 01st October 2012 (00 00 hrs onwards) will be recovered either by Travelling Ticket Examiners in the train or by the Booking offices before commencement of the journey. Officers and Supervisors from Commercial Department will make surprise checks all important stations to ensure that service tax is levied on tickets issued as per the revised rates.
In case of refund of passenger fare, if any, refund of Service Tax shall be claimed by the passengers from the Service Tax authority concerned. No refund shall be made by the Railways on this account. For the purpose of claiming refund, the office of the Chief Commercial Manager office of Zonal Railways concerned will issue a certificate to passenger detailing the amount of refunds on this account.
The Railways will deposit the amount of Service Tax collected from passenger with the Ministry of Finance as per procedure.
