Sans Didi Rail Bhavan Accepts to Pay Service Tax - Passengers to claim refund from Revenue Department only
THE tax was imposed on transport of goods by Rail in 2009 budget. The Railways really never took the tax seriously. DDT spoke to several Rail Officials and they considered the tax to be a joke. In 2009, DDT asked a senior Railway officer whether they were ready to collect Service Tax on goods transport. He told us that the Finance Ministry has no right to levy Service Tax on Rail freight and he had no instructions to collect the tax. He said his Board does not recognise this tax. We tried to explain to him that this was an Act passed by Parliament, but he was not impressed. He was sure that it requires approval by his Board and as of now his Board was not too keen to approve the Finance Act. He was aghast that somebody is trying to tax the Railways! When told that Railways are already paying Service Tax on catering, he said it was paid by IRCTC and not by Indian Railways.
From 2009 till June 2012, the tax was being exempted on a quarterly basis and the tax would have come into force from 1st July 2012 under the new regime, but even without Didi, the levy was exempted till 30th September2012. Now that Didi and her party are out of the complex coalition compulsion, the Government is free to levy the tax it wants. And the Railways have issued a Press Release that Service Tax is applicable from 1st October 2012. Transportation of passengers by Railways in First Class or Air-conditioned coach and transportation of goods by railways will attract Service Tax from 1st October. Service Tax is leviable only on 30 percent of the value.
But the Railways Press Note says, "In case of refund of passenger fare, if any, refund of Service Tax shall be claimed by the passenger from the concerned Service Tax authority. No refund shall be made by the Railways on this account. For the purpose of claiming refund, Chief Commercial Manager (CCM) office of concerned Zonal Railway shall issue a certificate to passenger detailing the amount of refunds to be signed by an Officer authorized by CCM, which shall be countersigned by the Dy. Chief Account Officer (DCAO) or officer authorized by them for this purpose."
Why should there be such a complicated procedure for refund? This means there will be no refund and every time you cancel a ticket, you will be donating 3.7% of your ticket as Service Tax to the Nation!
Now who will take registration as Service Provider? Every office that issues a ticket? Can't the Rail Board take a single registration and pay the Service Tax by one entry? That would solve a lot of accounting and record maintenance issues.