A minor fare hike has been effected for the first class and AC class in passenger trains from Monday. The Railway Ministry also decided to increase the freight charges by 0.5 per cent from June 1 as new service tax will come into effect.
“Currently, 3.708 per cent service tax is levied on train fares for AC Class, First Class and freight. This will go up to 4.2 per cent from June which means the rise is only 0.5 per cent,” said a senior Railway Ministry official. The official said the hike is marginal and it is being done as per the General Budget proposals.
For instance, if the AC fare is Rs1,000, then the passenger will be charged Rs10 more. Increase in service tax will be applicable on tickets purchased on June 1 and onwards. While the increase in passenger fare is applicable on AC and First Class only, service tax will be levied on all goods transported by Railways.
