Passengers travelling by AC coaches and first class will have to pay service tax from October 1, the railway ministry has decided.
The service tax amounting to 3.708% on the total fare will be applicable in AC first class, executive class, AC two and three tiers, AC chair car, AC

 
economy class and first class.
A railway ministry official said the service tax would be collected on tickets issued or bookings made on or after October 1; it would not be levied on tickets issued prior to October 1 and hence not be collected on board the trains.

In case of cancellation of tickets booked on or after October 1, the applicable amount, including the refundable service tax, will be refunded.

The official said commercial officers had been asked to conduct surprise checks at railway stations to ensure that the charge is levied.

"The service tax collected from passengers will be deposited with the ministry of finance wherein the zonal railways finance departments have been instructed for proper account and remittance," said the official.

"In case of fare refund, if any, service tax refund shall be claimed by the passenger from the service tax authority concerned," the official said.  "No refund will be made by the railways.

For claiming refund, chief commercial manager's office of the zonal railway concerned shall issue a certificate to the passenger detailing the amount of refund to be signed by an officer authorised by CCM and countersigned by the deputy chief account officer (DCAO) or officer authorised by them for this