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Indian Railways subjected to new freight tax

Follow @WDMEllaCopeland Indian Railways is set to increase freight charges levied on goods transported by trains next month, increasing the service ta...

Freddie Pierce
|Sep 28|magazine4 min read

 

Indian Railways is set to increase freight charges levied on goods transported by trains next month, increasing the service tax by up to 3.7 percent from October 1st.

An abatement of 70 percent has been permitted on freight for taxable commodities by the Ministry of Finance meaning that the service tax of 12 percent will be charged on 30 percent of the total chargeable freight (an equivalent of 3.6 percent on the total freight changes).

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The decision for levying service tax on freight and auxiliary services was taken yesterday at a meeting between Railway Minister CP Joshi and Finance Minister P Chidambaram.

In an online statement, The Indian Railways informed that certain commodities have been exempted of service tax as per the Ministry of Finance notification. The service tax collected by railways will be deposited with the Ministry of Finance. The service tax in case of railway travel, which was exempted until September 30th, will also be levied on the fare of most passenger services.

India has one of the world’s largest railway networks, comprising of 115,000 km of track.