AC Train Fares to Get Costlier by 3% From Oct. 1

Railway travel on air-conditioned coaches will be costlier by 3.7% as the finance ministry has decided to levy a service tax, which will also be applicable on freight rates.

The move by the finance ministry comes after Trinamool Congress, a constituent of the United Progressive Alliance (UPA), quit the ruling coalition.

Fares of AC first class, executive class, AC 2-tier, AC 3-tier and AC chair car will go up by 3.708% from October 1, 2012 and a notification to this effect will be issued on Sept. 27.

The service tax will apply to tickets issued in advance for journeys to start on or after the date of its implementation. In case of tickets already issued excluding service tax, it will be ensured that the same is recovered either by travelling ticket examiners in the train 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.

Freight rates will also go up by 3.708% from October. However, auxiliary services rendered at stations, such as catering and parking, will have to bear the burden of 12.36%, as there will be no abetment on these services.