The notification, levying service tax on high-end railway passenger fares, cargo and auxiliary services from October 1 just might leave passengers in the lurch in case they prefer to cancel their tickets as it would not be the job of the railways to refund the levied tax.
The service tax on air-conditioned classes will be charged at the rate of 3.708 per cent and first class tickets at 7 per cent. Auxiliary services such as catering and parking will be levied at the rate of 12 per cent. Freight will be charged at 3.708 per cent.
The problem will arise when passengers seek to cancel their tickets as the notification categorically states that the railways will not refund the service tax and that they will have to approach the service tax authority.
The entire money raised as service tax will be transferred to the Finance Ministry accounts and hence the railways have made it clear that they would not make refunds on the service tax account.
If one goes by the arrangement made, one will have to run from pillar to post to recover the money. As per the notification, a railway official will issue a certificate detailing the amount of refund and that will be counter signed by another official.
If one has the patience to get all this done then the next stop will be the service tax authority to get the refund. How this will work out in the case of tickets booked online and their consequent cancellation is not clear.