Mumbai: Commuters who travel first class in the city’s suburban local trains will have to pay more for their monthly passes from next month.
As Central and Western Railway will have to take care of the Goods and Service Tax (GST) compliances, the railways have increased the first class and air-conditioned tickets by 0.5%. Service tax was 4.5% while GST is 5%.
The railways are preparing new fare slabs for tickets of air-conditioned compartments in long distance trains and on on the first class tickets on local trains which will be applicable from July 1, as well as updating their software to incorporate the new fares. “Sleeper class is out of the GST, as the service tax was not levied on these tickets before,” Shailendra Kumar, Chief Commercial Manager, Central Railway said.
“To avoid any chaos at the booking counters, we are trying to create an awareness among passengers through various methods,” a senior official said. “It is common for passengers to manhandle railway property and use bad language after fare revisions. We are putting up a notice announcing the increased fares at all the counters.”
Passengers travelling for the purpose of business can claim the GST (5% on ticket amount) as input tax credit to reduce their expenses.
Freight will rise too
Freight rates will also be affected. Although, 5% of the GST seems more than the current service tax (4.5 %), the GST liability will go down due to input tax credit, which was not available with rail transport. Railway officials say this will help rail transport become more competitive and increase its use.
GST will not be applicable for transportation of items like relief material for disaster struck areas, defence or military equipment, newspapers or magazines registered with the Registrar of Newspapers, railway equipment or materials, and agricultural products.
