With TMC exit, Chidambaram to increase AC rail fares by 3%

Discussion in 'Economy & Infrastructure' started by Sridhar, Sep 27, 2012.

  1. Sridhar

    Sridhar House keeper Moderator

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    New Delhi: With the exit of Trinamool Congress from UPA, Finance Ministry has decided to levy service tax on AC rail travel and freight services fares, which are set to increase by 3.7 percent from 1 October.

    Fares of AC First Class, Executive Class, AC-2 tier, AC-3 tier, AC Chair Car will go up by 3.708 per cent from October 1 and a notification to this effect will be issued today, a senior Railway Ministry official said.

    The decision for levying service tax on AC classes and freight and auxiliary services was taken yesterday at a meeting between Railway Minister CP Joshi and Finance Minister P Chidambaram.

    AFP

    The service tax will apply to tickets issued in advance for journeys to commence on or after the date of its implementation. In case of tickets already issued excluding service tax, it will be ensured that the same is recovered either by TTEs in the train or by the booking offices before commencement of journey.

    In case of cancellation of tickets by the passengers, service tax will not be refunded by railways, the official said.

    On concessional tickets, service charges will be 30 percent of the total fare.

    The service tax is 12.36 per cent but after the abatement of 70 percent it will be 3.708 per cent on passenger fares in AC classes and freight.

    Passengers traveling in AC classes were brought under service tax from July this year as per the Finance Bill 2012 but the levy had since been kept in abeyance because of opposition by the TMC.

    Freight rate will also go up by 3.708 percent from October. However, auxiliary services rendered at stations like catering and parking will have to bear the burden of 12.36 per cent as there will be no abatement on these services.

    Service tax on freight was announced in 2009-10 Union Budget but then Railway Minister Mamata Banerjee had protested the move.

    With TMC exit, Chidambaram to increase AC rail fares by 3% | Firstpost
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Great going.

    There used to be a Death duty.

    When that will be brought back?

    It used to scupper a whole lot of money to the Treasury.

    For airline travel, there are a whole lot of other taxes that are levied on the base fare of the ticket.

    Why not add a 'decibel' level tax too?
     
  4. Defcon 1

    Defcon 1 Senior Member Senior Member

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    This is a good news actually, but I believe prices for sleeper class should have been increased as well. This will enable the railways to make investments towards better coaches and faster trains.
     
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  5. jackprince

    jackprince Turning into a frog Senior Member

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    Good news?!! Well I don't know how good it is going to be for me, who has to travel sometimes once a month from Mumbai to Kolkata off my own pocket. If it was only fare, it would have been very much acceptable, but the non-reimburseable service tax concept is totally freaking me out! That means I have to lose rs. 172/- + IRCTC charge 2*20/- = 212/- on each head, if I have to cancel a ticket on any emergency?!!!! WTF man, its totally freaking unacceptable. I am just a salaried middle-class man. a hundred bucks may not mean anything to millionaires of Congis party, but if i have to lose a 1000 buck 'coz my wife is not feeling well enough to travel, well it will hurt. I already am stretching to afford 3AC for my family's comfort!!

    Now, even I would vote for Mamata!!!
     
  6. Defcon 1

    Defcon 1 Senior Member Senior Member

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    I am a middle class person as well and travel once every two months. How often do you think such a situation arises when you cancel your ticket. I believe this is being done to stop people from making more than one reservation which they do to have a safe side, like when they are not entirely sure about the dates. Non reimbursement of service tax will stop people from doing so and thus make sure that seats do not get filled up so quickly as is the case right now.
     
    Last edited: Sep 27, 2012
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  7. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    Defcon1 is right, this is very good news. The nation cannot make rules for exceptional conditions of the kind that you speak of. I am sorry to say, this country's middle class is too used to being pampered and getting subsidies which they do not deserve. Its time the middle class learned to pay for what they consume.

    The message is: travel by 2nd class if AC is too expensive for you. Don't live beyond your means and expect the nation to subsidize it.

    Harsh, but that is the reality.
     
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  8. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    I would like to add to this: we will forever be stuck in mediocrity if we do not learn to pay up for what we consume, as a nation. Indian railways cannot eat up the budget like a gigantic sink. Indian railways needs to make a profit, it needs to expand. It needs to add new tracks, augment capacity, switch to electrified engines, and then start high speed services between the metros.

    If the great Indian middle class moans and whines for a potential Rs. 200 cancellation charge, and speaks of voting Mamata back for the same, I don't see the country progressing anywhere.
     
    Last edited: Sep 27, 2012
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  9. Rahul92

    Rahul92 Senior Member Senior Member

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    WHY AC Only :why::why:
     
  10. ant80

    ant80 Regular Member

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    That's the first thing that popped into my mind. Why not implement the entire railways reform that the old railways minister brought in its entirety before Mamata canned him?
     
  11. Ray

    Ray The Chairman Defence Professionals Moderator

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    But then that would not be populist!

    Actually privatise the railways. Let there be fares that are profitable.'

    And damn the lower class travellers.

    They can go by bus!

    Will help the transport industry.

    Bring in FDI in Passenger transportation.

    Nothing like Amtrak and Greyhound to make us world class!

    However on the issue of the middle class being pampered, it is the middle class, the majority being govt servants who cannot fudge taxes, are the ones who are holding up India on his shoulder, like Atlas holding up the world.

    Can't let them shrug,can we?

    I am totally excited with Mohna, Chidu combine.

    I can't afford to go to the US as of today, so I am thrilled that they will bring America to us!
     
    Last edited: Sep 27, 2012
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  12. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    Your sarcasm is not realistic. You forget that most of the buses that the "poor class" use in rural areas are also private. Rest assured, even if you privatize railways there will be players who cater to the "poorer sections" too, and they will do a better job of it than the current IR.They will provide better value for money to the poorer sections who will travel by those trains.

    And yeah, FDI will be a hit in railways, with high speed travel between metro cities in India - the great Indian middle class will lap it up.

    Most of the buses, tempos, matadors that the "poorer classes" use in Indian villages are also run by "private operators" anyway. When there is a market and demand, it will be catered to.
     
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  13. Yusuf

    Yusuf GUARDIAN Administrator

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    3% hike is pretty minimal. i mean Rs 30.00 for a 1000 bucks ticket.

    A Bangalore Mumbai 2AC costs 1500.00. The hike of 3% means an extra 45.00.

    After 7 years of no hike when other prices have gone through the roof, id say we have got a pretty puny hike.
     
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  14. Ray

    Ray The Chairman Defence Professionals Moderator

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    My sarcasm is direct.

    No one minds paying for services provided they get the services.

    The Govt carries on taxation for this or for that, but it is never used for the same.

    Take the case of education. We pay a education surcharge in not only Income Tax of 2%, but also when we one has to get a licence for liquor.

    Calculate the money accrued by the Govt.

    Is it being used for education?

    We pay so many additional surcharge for air travel.

    Do we get the benefits?

    Think that over!
     
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  15. Yusuf

    Yusuf GUARDIAN Administrator

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    An Ambani will make sure he makes a killing my offering low fares to the poor. Kar lo duniya mutthi mein.
     
  16. Ray

    Ray The Chairman Defence Professionals Moderator

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    Add up the 'small' hikes that your monthly domestic budget handles and then we can talk.

    You fly don't you?

    You pay taxes, don't you?

    Check what all you are paying for in those taxes as 'additionals' and see if the 'additionals' are going for the cause you are paying for as a good citizen!
     
  17. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    The middle class are not the only ones who pay taxes. The middle class pays a minimal amount of tax, in the larger scheme of things. Because even a beggar on the street pays taxes every time he buys anything from a store. Even the urban and rural poor pay tax - massive amounts of tax. You are thinking only of income tax.

    Now, I am not saying that the middle-class is "pampered". But the middle-class has become too used to useless socialist subsidies. These subsidies almost brought down the nation, and if we don't get rid of the subsidy mentality, we will bring the country crashing down very soon. All these years, the Maruti-owning middle-class wallah was buying subsidized petrol. Why? Subsidized LPG. Why?

    No more subsidies. Live within your means - that is the message to the middle class of the nation - actually to the entire nation. Even I want to do so many things in life - I want to travel first class and business class whenever I travel. I cannot afford it, I am forced to stay within my means.

    It is high time the people stopped expecting subsidies.
     
  18. Ray

    Ray The Chairman Defence Professionals Moderator

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    Heard of the OROP that the Govt tried to pass off?

    That is the typical fraud that the Govt is doing to even the general public!

    OROP that they announced is in consonance with the order that the fraud the Govt did with the 4th Pay Commission be made up.

    And the Govt called it OROP and instead of implementing the SC order of paying up from the 4th Pay Commission time, they said it will be effective from last Monday!

    Who can trust these people who have seen and attended their parents wedding?
     
  19. Ray

    Ray The Chairman Defence Professionals Moderator

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    Time you check your facts as to who contribute maximum to the exchequer!

    No one is asking for the moon.

    They are merely asking for the earth that they dwell upon!

    Just the basics to live a life that is worth living.

    And not be hounded by foreigners that we are sub saharan!

    You may not be, but then there are many who may qualify!

    Everyone is not born with a silver spoon in the mouth as you!

    Pause from your parents and God given bounty and think of the masses for a change and then talk!
     
    Last edited: Sep 27, 2012
  20. Yusuf

    Yusuf GUARDIAN Administrator

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    I dont fly.. I go by train.. i have a whole bunch of tickets booked for the december wedding season.. the TTE is going to take the hike amount from me.

    India has 35 million income tax payers out of 1.2 billion.. i am one of those IT payers. taxes in India are modern day Robinhood measures with people like SG with the remote control. Take from the taxpayers, shower on the poor.
     
  21. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    If you talk of Indian railways as an example, IR is still mediocre and crappy because the subsidies don't allow IR to develop and grow. That is how is has been over the years - IR has leeched off the rest of the country. IR, AI, and every entity for that matter, needs to stand on its own feet. If it cannot, then it does not deserve to exist, and the resources that are being expended there are better served elsewhere.

    It is easy to say, "the government does not do anything with tax" - this is a typical middle class living room statement. Everything you see around you, the roads, the infra, the water, the law and order, peaceful society - everything is because the government does something with your taxes. Yeah, everything is mediocre and bad, and nothing is "world class" - but frankly, things have got better in the last 20 years. And things will continue to get better as growth and prosperity increases, and subsidy-leech culture vanishes. :cool:
     
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