Service Tax on AC, Freight Rates to go up From Oct 1 : Finance Minister

According to a notification from the Finance Ministry, service tax on AC and freight services will go up by 3.7% from October 1.

According to Railway Ministry, fares of AC first class, executive class, AC-2 tier, AC-3 tier, AC chair car are set to increase rates by 3.7%. This will apply to the tickets that are issued in advance for journeys on or after the date of its commencement/implementation. In case of tickets that are already issued excluding service tax, the increased amount would be recovered either by TTEs in the train or by the booking offices.

Further the official said that, service tax will not be refunded in case of cancellation of tickets by the passengers.

The decision is declared just after Trinamool Congress exited UPA (United Progressive Alliance) government. As per the Finance Bill 2012, service tax is levied on AC classes from July but the levy had been kept in suspension because of opposition by the Trinamool Congress.

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