New Delhi: Railway fares for travel in the upper class categories will go up as service tax levy of 14 percent and a Swachh Bharat cess of 0.5 percent become effective.
According to a rail ministry circular, fares will go up by 4.35 percent for First Class and all AC Classes from 15th November. There was a notification by the government for imposing a Swachh Bharat cess on all taxable services on 6th November.
According to the circular, Service tax of 14 percent and Swachh Bharat cess of 0.5 percent are chargeable on 30 percent total passenger fare equivalent on 30 percent of total passenger fare equivalent to 4.35 percent of the total fare on first class and all AC fares.
However, the service tax will not be applicable for tickets issued before 15th November. Proceeds from this cess to be exclusively used for Swachh Bharat initiatives.
Swachh Bharat Cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat.