Title - COSTLY JOURNEY AC train fares, freight rate up 3.7% from Oct

New Delhi: Travelling by train in airconditioned comfort will get more expensive from October 1 with the finance ministry prevailing upon the railways to levy service tax on AC travel and freight movement. AC class passenger fares and freight charges will go up by 3.7%.
    Service tax of 12.36% will be levied on auxiliary services provided at stations such as catering and parking.
    The levy will also apply to tickets bought in advance for journeys after October 1. If the tickets have been issued excluding service tax, the difference will be collected either by ticket examiners on trains or by booking offices before commencement of the journey. Under pressure from its then ally Trinamool Congress, which held the railways portfolio, the finance ministry under Pranab Mukherjee had deferred the decision to levy service tax for three months. The threemonth extension ends on September 30.
    The decision to impose service tax was taken after a meeting on Wednesday between newly appointed railway minister C P Joshi and finance minister P Chidambaram amid indications that the railways, under the new regime, is set to accelerate its reforms agenda as suggested by Prime Minister Manmohan Singh and Planning Commission which also included a hike in passenger fares.