Sources have stated that previously service tax was applicable on the transport of goods & passengers. The railways also enjoyed a 70% abatement, which means only 30% of the value was taxable under service tax. Thus, the effective rate was =30% of 15% = 4.5% of the total fare. GST rates on rail transport are capped at 5%, as announced on 19th May 2017.



According to sources GST will not be exceptionally beneficial to passengers who are end consumers as the effective service rate which was 4.5% will now increase to 5% in GST. In fact, ticket prices will increase slightly due to the slight increase in the tax rate.

Image result for Will your rail ticket prices and holiday plans has impact on GST??

Moreover the transport of goods and passengers by rail will attract 5% tax under GST. Although it seems more than the current effective service tax of 4.5%, the effective GST liability will go down, thanks to the mechanism of input tax credit which is now available on rail transport, which will be exceptionally beneficial to the railways as there is no ITC available on transportation through Goods Transport Agencies (such as trucks). GST rate is also 5% on road transport, thus making the rail freight more competitive.


మరింత సమాచారం తెలుసుకోండి: