Rail fares for Air-conditioned first class, AC 2-tier and non-AC 1st class and 1st AC chair car are up starting Sunday. Some 30 crore passengers use these services every year.
The hike was proposed in the Railway Budget presented by the former Railway Minister, Mr Dinesh Trivedi, and was not rolled back by his successor, Mr Mukul Roy, both of whom are from the Trinamool Congress, a coalition partner in the ruling UPA.
All air-conditioned and 1st class train passengers — including the AC 3-tier and AC chair-car segment, who have been spared by Mr Roy — need also have to watch for the Finance Minister, Mr Pranab Mukherjee's move on service tax.
Service tax
They may have to shell out service tax on train fares because Mr Mukherjee does not propose to include them in the negative list proposed in the Union Budget.
The Finance Minister though has diluted the extent of hike with the abatement clause, which reduces the effective incidence of service tax to 3.6 per cent instead of the 12 per cent service tax rate.
For those who have already booked tickets for travel starting after April 1, 2012, the difference in fares from April 1, 2012 will be recovered by TTEs in the trains or by the booking offices before commencement of the journey.
But this practice of the Railways has led a passenger, who booked his travel in advance on AC 2-tier and will now have to pay Rs 300 extra, to raise a query.
Since the fare hike came in after he booked the ticket, he said, “Railways should provide me an option of travelling reserved AC-3 tier. I may have changed my decision to travel by AC-2 tier if I had known about the higher fares.”