This follows a decision taken at a meeting between Railway Minister C P Joshi and Finance Minister P Chidambaram here.
Fares of AC First Class, Executive Class, AC-2 tier, AC-3 tier, AC Chair Car will go up by 3.708 per cent from October 1 and a notification to this effect is being issued, a senior Railway Ministry official said.
Besides, the service tax will also be levied on freight and auxiliary service, he added.
The service tax is 12.36 per cent but after the adjustment of 70 per cent of this, it will effectively be 3.708 per cent on passenger fares in AC classes and freight services.
However, auxiliary services rendered at stations like catering and parking will have to bear the burden of 12.36 per cent hike as there will be no adjustment on these services.
The decision comes days after the exit of Trinamool Congress (TMC) from the UPA government. TMC, which had held Railway Ministry portfolio, had objected to service tax being levied on these services.
The service tax will apply to tickets issued in advance for journeys to commence on or after the date of its implementation. In case of tickets already issued excluding service tax, it will be ensured that the same is recovered either by TTEs in the train or by the booking offices before commencement of journey.
In case of cancellation of tickets by the passengers, service tax will not be refunded by railways, the official said.
On concessional tickets, service charges will be 30 per cent of the total fare.
Passengers travelling in AC classes were brought under service tax from July this year as per the Finance Bill 2012 but the levy had since been kept in abeyance because of opposition by the TMC.
Service tax on freight was announced in 2009-10 Union Budget but the then Railway Minister Mamata Banerjee had protested the move.
The increase in sleeper class fares should have been considered on the basis of minimum percentage increase on slab basis like 1-500 kms, 501-1000 kms vice versa which would have definitely lowered the burden on already overburdened middle class and low income category of people who use this particular class to travel. Long distance passengers are the worst hit. I think our Hon`ble Railway Minister Sir and the government should reconsider its decision and try to reduce the increase in fares on sleeper class.
Continue these type of hike for another one and half year and show drama of welfare measures to divert once again attention of people. Please show all these meodramas with the chelas paticipation as please exhibit new themes to amuse the ordinary of India(Have'nts)