Levy of Service Tax on Railway Passengers Travelling in AC Classes/First Class from tomorrow i.e. 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
In compliance of the provisions contained in Finance Bill 2012 and subsequent notifications issued by Ministry of Finance, the Service Tax in case of railway travel will be levied on the fare of passenger services in the following classes from tomorrow i.e. 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:-
1. Service Tax of 12% will be charged on 30% of fare (equivalent to 3.6% on the total fare)
2. Education Cess of 2% on Service Tax will be added (equivalent to 0.072% on total fare) and
3. Higher Education Cess of 1% on Service Tax will also be added (equivalent to 0.036% on total fare)
4. Total Service Tax implication will be (i)+(ii)+(iii)=3.708% on the total fare.
On Concessional value tickets, service charge will be levied @ 3.708% of the total fare actually being paid by the passengers.
Through a subsequent corrigendum issued by M/o Railways, 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 livable on tickets issued prior to 01.10.2012 and hence will not be collected on board the trains.
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.
The amount of Service Tax collected from passengers will be deposited with the Ministry of Finance as per prescribed procedure. Finance Departments of Zonal Railways have been instructed for proper accountal and remittance of Service Tax amount to the Government.
(Release ID :88062)
Railway Board Order:
The General Managers,
All Indian Railways
Fare Tickets Booked and Cancelled on or after 01.10.2012.
on transportation of passengers by Rail in Air-conditioned classes and 1 AC
Class. The following has been stated therein:
01.10.2012, service tax can be refunded by Railways except for the portion of
service tax on the amount of cancellation charges retained by the Railways.
of service tax:
retained by the Railways at the rate of 3.708% on the charges retained. The
remaining portion of service tax collected at the time of booking shall be
refunded along with the refundable fare portion.
tickets booked by passengers on or after 01.10.2012.
module will be made effective by 10th of October, 2012, the following manual
refund procedure shall be followed in the interim period, that is, between
01.10.2012 and 10.10.2012:-
after 01.10.2012, service tax to be refunded would be done manually by Railways
at the booking counters. In order to facilitate the refund process, the amount
to be refunded would be displayed through PRS on the cancellation form itself of
the PRS terminal.
be maintained in a separate register. The details of service tax refunded shall
also be endorsed on the cancellation ticket by the booking deck.
IRCTC will refund the service tax to passengers from the e-ticketing front-end
application and account for the same with Railways. The details of the amount of
service tax to be refunded on the cancelled e-tickets would be sent by PRS to
IRCTC while cancelling the tickets and service tax should be refunded in the
same manner as refunds done for other cancelled tickets.
system itself, through the PRS and the UTS cancellation and accounting modules.
ISSUED ON 26.09.2012
The General Managers,
All Indian Railways
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