The Goods and Service Tax (GST), set to kick in on July 1, will replace service tax for all airconditioned and first class railway tickets.

However, tickets booked before July 1 for journeys starting on or after that date will not attract the tax and the difference in service tax and GST will not be collected.

GST will come into effect only on tickets booked on or after July 1, a circular issued by the Railway Board on June 23 has said. As per the circular, the rate of GST will be 5% of the total fare.

In the case of tickets that were booked before July 1 but cancelled after the date, the entire amount along with service tax will be refunded after the cancellation charge is deducted.

However, an amount calculated on ther GST rate will be deducted on the cancellation or clerkage charge applicable, the circular said.

In the case of cancellation of tickets booked after July 1, the total amount, inclusive of the GST charged at the time of booking, will be refunded with a deduction of the cancellation or clerkage charge, the circular said. The GST amount on that charge will be retained by the railways, it added.

The railways will also do away with, from July 1, combined return journey tickets for AC and first class passengers. This means that separate tickets will be issued for onward and return journey to implement GST guidelines, the circular directed.

For suburban commuters, a combined return journey ticket will be issued if the originating station and the terminating station fall within the same state. Some zonal railways accord the provision of circular rail journeys, especially for passengers opting for pilgrimages or sightseeing trips to many destinations.

These journeys began and ended at the same station and passengers could take the advantage of telescopic rates which are considerably lower than regular point-to-point fare. However, to implement the GST guidelines, the circular rail journeys will be discontinued from July 1, the circular has said. #casansaar (Source - Times of India)