Charging of Service tax on Railway Ticket and refund of service tax on cancellation of ticket issued on or after 01.10.2012

Levy of Service Tax on Railway Passengers Travelling in Ac Classes/First Class from 1st October 2012

 

No Service Tax to be Levied on Tickets Issued Prior to 1st October 2012

 

In Case of Cancellation of Tickets Issued on or after 1st October 2012, the Applicable Amount Including Service Tax to be Refunded by Railways along with refund amount.

 

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 1stday 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 Railway refund rules and Finance Ministry guidelines.