The railways has made partial modifications related to levying of service tax on the fare of passengers travelling in air conditioned coaches, first class from October 1.
As per the modifications issued on Friday, service tax amounting to 3.
7 per cent on the total fare of passenger services in AC classes, first class is applicable from the October 1.
The railways has clarified that the service tax would be collected on the tickets issued/bookings made on or after October 1 and service tax is not applicable on tickets issued prior to October 1 and hence will not be collected from the passengers on board.
In case of cancellation of tickets booked by the passengers on or after October 1, the applicable amount including refundable service tax amount will be refunded by railways as per the guidelines issued by railway refund and ministry of finance.
In case refreshments are a part of the total ticket fare, service tax will be levied on the gross amount charged from the passengers.
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