Those travelling in AC coaches of trains will now have to shell out more from Wednesday, with the government deciding to impose ‘Krishi Kalyan’ cess of 0.5 per cent on service tax.
Krishi Kalyan cess of 0.5 per cent on service tax will be imposed on all AC class tickets, freight and parcel, a senior Railway Ministry official said.
He said the overall impact of service tax on AC train fare will be 0.15 per cent.
- Suburban trains’ contribution: 1/3rd of traffic, 3 per cent of railway earnings
- Two months on, reduced ridership during non-peak hours in AC local train
- Effective rate of the Krishi Kalyan Cess to be lower than 0.5 per cent
- Upper class rail travel gets dearer with Swachh Bharat cess
- Over 4 per cent hike in upper class railway fares from tomorrow
- Railways to hike AC class fares by 0.5 pc from June 1
“The increase in service tax will be applicable on tickets issued on or after June 1. The service tax will not be levied on tickets issued prior to June 1, 2016,” a railway notification stated.
The service tax is not applicable to non-AC and Sleeper class travel.
Imposing Krishi Kalyan cess on service tax from June 1 was part of Railway’s budgetary proposals.