CLARIFICATION ABOUT SERVICE TAX BY RAILWAYS

No.223/2012-13	28-09-2012 Secunderabad
No Service Tax on Tickets Issued Prior to 1st October, 2012

It was announced earlier that Service Tax will be levied o­n AC and First Class Tickets issued in advance i.e., before 1^st October, 2012 for travel o­n or after 1^stOctober, 2012 and Railways will not be able to refund the service tax collected. Railway Board have issued the following modifications in respect of these announcements cancelling the service tax o­n tickets issued prior to 1^stOctober, 2012 for journey o­n or after 1^st October, 2012 and allowing the railways to refund service tax o­n tickets booked o­n or after 1^stOctober, 2012;-

1)Service Tax is not leviable o­n Tickets issued prior to 1^st October, 2012 and hence service                       tax will not be collected from the passengers o­n Board by Travelling Ticket Examiners.                           Service Tax is leviable from 1^st day of October, 2012. Service tax will be collected o­n the                         Tickets issued / booking made o­n or after 1^stOctober, 2012.

2)In case of cancellation of tickets booked by the passengers o­n or after 1^st October, 2012, the service tax will be refunded by the Railways except for the portion of service tax o­n the amount of cancellation charges retained by the Railways.

3)Wherever food and refreshment are a part of the total ticket fare, service tax will be levied o­n the gross amount charged from the passengers towards the ticket at the rate of 3.6% + 0.072% Education Cess + 0.036% Higher Education Cess (Total – 3.708%).

                  It is clarified that the imposition of Service Tax is done as per the provisions of                                         Finance Bill-2012.

Railways will not retain the Service Tax proceeds with them and will remit the amount of             Service Tax collected from the passengers to the Central Government Exchequer as per the procedure.