Service Tax on high-end class travel, freight and auxiliary service rail fares

The new Railway Minister C.P. Joshi and the Finance Minister P. Chidambaram in their meeting held on 26 September 2012 came up with the decision to regulate service taxes on high-end passenger classes like AC along with freight and auxiliary services provided by the railways. The taxation will be in effect from 1 October 2012. Implementation of the taxes will help the exchequer in generating estimated revenue of Rs 3100 Crore annually.

Percentage increase in the fair chart for different segments is as follows:

• First Class - 7 percent
• Air-conditioned - 3.708 percent
• Freight charges - 3.708 per cent
• Auxiliary services at stations – 12.36 percent
• The fair for high-end passengers have been increased by 30 percent

Busy route surcharge during busy season of maximum 10 percent varying from commodity to commodity on freight will also come on effect from 1 October 2012. This step will help in winning an additional sum of Rs 826 crore in upcoming six months for the railways.