Mumbai: Increase in service tax may lead to hike in first-class train ticket fare

The increase in service tax from 12.36% to 14% may result in a fare hike for first-class travel in local trains and AC coaches in long-distance trains, from April

Even if Railway Minister Suresh Prabhu gave relief to passengers by announcing no increase in fares in the budget, people travelling in first class in local trains, as well as AC coaches in long-distance trains may still not be spared. The increase in service tax, from 12.36 per cent to 14 per cent announced by Finance Minister Arun Jaitley, might result in a possible fare hike for them.

Officials said that the argument for the hike is that commuters travelling in first class compartment can pay the excess amount. Pic for representation
Officials said that the argument for the hike is that commuters travelling in first class compartment can pay the excess amount. Pic for representation

The increase in fare is expected for season tickets for commuters travelling in first class compartments, along with coaches of 3AC, 2AC, 1AC and AC chair car for long-distance trains. Sources told mid-day that the hike in suburban trains can be anywhere between Rs 5-10 for a monthly ticket, and a corresponding increase for 6-monthly and yearly ticket as well.

According to sources, at present the service tax charged per ticket is 3.7 per cent. However, from April, the tax is expected to rise to 4.3 per cent. Officials said that the argument for the hike is that commuters travelling in the first class compartment can afford to pay the excess amount.

Currently, no official circular has been received by railway authorities, on the probable fare hike brought on by the increased service tax. Once the Union budget is cleared, the Indian Railways in Delhi is expected to send an official circular on the same.

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