GST will be increasing burden on the people who are habitual of traveling through AC class in railways. Apart from this, if GST implements from 1st July, all those who have booked their tickets earlier, will have to pay the remaining tax in between journey. It is expected that the rail fares of Air Conditioner Class are likely to go up from 1st July once GST implements.
According to the Indian Railway officials, it is declared that people who have booked the rail tickets for Air- Conditioner Class before the implementation of GST, or will travel after 1st July will have to pay the remaining tax during traveling and remaining tax will be calculated on the basis of GST regime.
Under the new indirect taxation structure, 5 percent tax will be imposed for Air Conditioners in railways which are similar to freight charges. Currently, passengers are paying 4.5 percent as service tax. According to the Indian Railways, officials said that people who have booked tickets for AC class before the implementation of GST but they will travel after 1st July will have to bear the remaining taxation amount during the journey on the basis of the new tax regime.
The impact of GST on Indian railways will have no major changes and will try to keep minimum differential in fares of Sleeper and general class. Officials said that the railways have to make long exercises in the upcoming GST implementation. The reason for this is that if corporate employees traveling in AC class for their office purpose and the company is paying their ticket, then the company will take invoices in lieu of the paid GST.
This allows the customer to credit the GST paid on the passenger fare at the time of purchase of raw material or goods he bought. However, passengers who travel by their own money will not receive any kind of claim, hence there will be no hassle for an invoice for them.
