With the Goods and Services Tax (GST) coming into effect from on Saturday, rail passengers will have to pay a little more to travel AC and first class. Service tax on AC ticket charges will be hiked from 4.5 per cent to 5 per cent, an increase of 0.5 per cent, after the GST implementation.
Similarly, GST on transport of goods by rail will be 5 per cent in place of service tax of 4.5 per cent levied earlier with exemption for essential goods like milk and agriculture produce.
Service tax is levied only on AC and first class fares in the Railways. So if a ticket costs Rs 2,000, then a passenger will have to shell out Rs 2,010 from July 1. However, a passenger will not have to pay if in case tickets were booked in advance for journey to commence on or after July 1.
Suggested read: What will be cheaper and what costlier | Here is the complete list
The GST difference of fare shall not be collected on the tickets booked in advance as the GST shall be applicable on tickets issued on or after July, 2017, said a senior Railway Ministry official.
In case of Rajdhani, Shatabdi, and Duronto trains where catering charges are included in the fare, the charges of catering component will get modified as per the new GST from July 1.
Exemptions have been granted from the levy of GST in respect of passengers travelling in second class, metro, sleeper class, transportation by rail of agricultural produce, relief materials, milk, salt, food grain including flours, pulses and rice, railway equipment and materials, and defence and military equipment.