Levy of service tax on transportation of passengers by rail.
GOVERNMENT OF INDlA
MINISTRY OF RAILWAYS
(Commercial Circular No. 32 of 2015)
No. TCII/2910/2012/Service Tax
New Delhi, 26.05.2015
The General Managers,
All Zonal Railways.
Sub: Levy of service tax on transportation of passengers by rail.
Ref.:- Board’s letters of even no. dated 26.06.2012, 26.09.2013(C.C. No.58 of 2012), 28.09.2012 (C.C. No.59 of 2012), 29.09.2012 (C.C.No.60 of 2012) & 10.10.2012 (C.C. No.62 of 2012).
In terms of Board’s letter of even no. dated 26.06.2012 service tax of 3.708% is levied on the total fare. As per General Budget 2015-16 announcement, the ‘Education Cess’ and ‘Secondary & Higher Education Cess’ shall be subsumed in the new service tax rate and service tax rate is proposed to be increased from 12% plus Education Cesses to 14%. Accordingly, it is proposed to modify para 3 of Board’s letter of even no. dated 26.06.2012 as under:-
“Service tax of 14% will be charged on 30% of passenger fare equivalent to 4.2% of the total fare in first Class and AC Classes.
- The increase in Service Tax will be applicable w.e.f. 01.06.2015 on the tickets issued/bookings made on or after 01.06.2015. Service Tax increase is not leviable on tickets issued prior to 01.06.2015.
- Besides this, there is also a proposal to levy Swach Bharat Cess on all or certain taxable services at a rate of 2% on the value of such taxable services. If Railways is also included in the list for Swach Bharat cess, the same will be notified later.
- Other terms and conditions will remain the same as per various circulars/notifications issued on this subject. Necessary instructions may be issued to all concerned.
- This issues with the concurrence of Finance Directorate of Ministry of Railways.
(Dr. S. K. Ahirwar)
Director Traffic Commercial (G)