NEW DELHI: Railway ticket fares in air-conditioned and first class coaches are all set to increase by 0.5 per cent from Monday to counter the increase in service charge that will take effect from June.
According to Railway Ministry, currently a service tax of 3.7 per cent is levied on train fares for AC Class, First Class and freight and it will go up to 4.2 per cent from June, a rise of 0.5 per cent. On a ticket of Rs 1000, the hike will be Rs 10.
Service tax will be levied on all goods transported by Railways while there will be no change in the fares for sleeper class and unreserved category.
The hike is marginal and it is being done as per the proposals announced in the Union Budget. Since June 25, when the NDA Government effected 14.2 per cent across the board hike in passenger fares the government had shied away from any further hike in the fares.