Travel by first and other AC classes in trains is set to become costlier from Wednesday with the Railways imposing 0.5 per cent Krishi Kalyan cess on 30 per cent of the total fare.
Krishi Kalyan cess at the rate of 0.5 per cent would be levied on the value of all taxable services from June 1. In essence, 4.5 per cent of the total fare in first class and all AC classes would be collected as taxes —14 per cent service tax, 0.5 per cent Swachh Bharat cess and 0.5 per cent Krishi Kalyan cess on 30 per cent of total passenger fare.
The increase in service tax would be applicable from June 1 on the tickets issued or bookings made on or after June 1. This tax increase is not applicable on tickets issued prior to June 1, the circular added.
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Meanwhile, the board has decided to withdraw the service charge of Rs. 30 levied on credit and debit card purchase of tickets at passenger reservation system counters from Wednesday (June 1).