Service tax mess looms on trains

Sep 28, 2012 - MANISH ANAND |

Age Correspondent

The move to charge service tax on AC rail tickets starting October 1 seems to have caught the Indian Railways off guard, and it is flummoxed on how to collect this amount from lakhs of passengers travelling with tickets bought in advance.

A senior railway official said there were not enough staff on trains to collect the tax starting Monday. “We already have a shortage of 1.58 lakh safety staff. There is not enough manpower to carry out such an exercise,” an official said, adding: “We can’t just collect service tax, we have to maintain records and issue receipts.”
Passengers travelling from Monday on tickets bought earlier may also face harassment if there is an attempt to penalise those who cannot show receipts showing service tax has been paid in surprise checks at stations.
Later, those buying tickets on which service tax is charged will face harassment if they have to cancel them. The railway ministry has said “if tickets are cancelled, the service tax amount will not be refunded at the rail counter”. They will have to claim the refund from the relevant service tax authority after getting a certificate of cancellation from the railways.
What about the tickets bought online via IRCTC? The railways have no answers.
It is unclear why the railways are unprepared for this as the service tax (3.708 per cent of total fare value) was proposed in the Union Budget in March, but deferred till September 30.

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