Train fares rise on Swachh Bharat cess

New rates effective will be effective from 15 November; service tax on both rail services up from 4.2% earlier to 4.35%.

The rail ministry on Tuesday announced it had imposed Swachh Bharat Cess on its services, leading to a net 0.15 per cent increase in service tax on passenger fares and freight rates.

The new rates came into effect from November 15.

As a result, service tax on both the rail services rose from 4.20 per cent to 4.35 per cent.

After this revision in tax rates, second-class air-conditioned fares for a journey between Delhi and Mumbai in the Rajdhani Express has gone up from Rs 2,565.4 to Rs 2,569 a ticket.

“The net increase in fare is around Rs 4 per ticket. This is applicable only for first class and all other AC classes of travel,” the ministry said in a statement.

Also, the ministry has levied Swachh Bharat Cess of 0.5 per cent on transportation of goods, complying with a finance ministry’s notification issued earlier this month.

However, the total implication of the cess on freight would only be 0.15 per cent of total freight cost, as 70 per cent tax abatement was allowed on goods transport by rail.

The ministry also announced the minimum train passenger fare would go up from Rs 5 to Rs 10. Price of a platform ticket was revised from Rs 5 to Rs 10 in April, as proposed in the railway budget.

However, the objective could not be realised as passengers opted to purchase the minimum single journey second-class tickets, priced at Rs 5.

The increase in the minimum fare from Rs 5 to Rs 10 would address this issue. The changed rate will be applicable only on second class non-suburban services.