Home / Politics / Policy /  AC train fares to be costlier by more than 3% from 1 Oct

New Delhi: Travel in air-conditioned railway coaches will be costlier by 3.7% from 1 October. The finance ministry has decided to levy a service tax on AC train travel and on freight.

The move by the finance ministry comes after the Trinamool Congress (TMC), a constituent of the United Progressive Alliance, quit the ruling coalition and Mukul Roy, a TMC parliamentarian, was replaced by C.P. Joshi, a Congress party leader, as railways minister.

Fares of AC first class, executive class, AC 2-tier, AC 3-tier and AC chair car will go up by 3.708% from 1 October and a notification to this effect will be issued on Thursday, a railway ministry official said, requesting anonymity.

The decision to levy service tax on travel in air-conditioned coaches and freight and auxiliary services was taken on Wednesday at a meeting between Joshi and finance minister P. Chidambaram.

The service tax will also apply to tickets booked in advance for journeys starting on or after 1 October. In case of tickets issued before the said date, the difference in fare shall be collected from passengers by travelling ticket examiners in trains or by the booking offices before the start of a journey.

In case of cancellation of tickets, the railways will not refund the service tax, the official said. Passengers seeking a refund of service tax will have to send their claims to the service tax authority concerned after getting a certificate issued by the chief commercial manager of the zonal railway from where the journey originates, the railways said in a release.

Freight rates will also go up by 3.708% from October. Service tax on freight was announced in 2009-10 national budget, but the then railway minister Mamata Banerjee had protested the move.

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