The passenger fares in all AC classes and first class of train and rail freight tariff will go up from the 1st of next month as the government has decided to levy service tax on them.

An official release said, since an abatement of 70 percent has been permitted on passenger and freight services by the Ministry of Finance, the Service Tax will be charged on 30 percent of total passenger fare and 30 percent of total chargeable freight.

The total Service Tax implication on the fares of such classes and on rail freight will be around 3.7 percent each.
On concessional tickets, service charges will be 30 percent of the total fare actually being paid by the passengers.

This follows in compliance of the provisions contained in Finance Bill 2012 and subsequent notifications issued by Ministry of Finance in this regard.