Gst On Train Tickets

The Indian Railways has been brought under

GST for both its passenger transportation as well as its goods transportation. Prior to the implementation of GST, service tax was applicable to the transport of passengers and goods. In addition, the Indian Railways also enjoyed 70% abatement, which made only 30% of the value taxable under service tax of 15%, which means 4.5% of the total fare.

GST for Railway Passengers

With the implementation of GST, end consumers now pay 5% in GST on the full ticket price, up from 4.5% of service tax. However, any passenger that makes use of the

Indian railways to travel for business purposes can file input tax credit (ITC) claims on ticket prices. Doing so helps business owners reduce their expenditure on railway usage.

GST Implementation for Goods

Transportation of goods is also currently set at 5% GST, but the effective rate can be brought down by

businesses to 4.5% by filing input tax claims. With no input tax credit available for the transportation of goods via Goods Transportation Agencies.

Sale of Goods Transported

The GST Council defines “goods” as per clause (7) of section 2 of the Sale of Goods Act, 1930 (3 of 1930). GST for goods that fall under the Act are divided into multiple categories.

Commonly used Goods and services – 12%
Standard Goods and Services – 18%
Special Goods and Services – 28%
Luxury Goods and Services – 28%
Most essential goods and services – Nil/Exempted from GST

Taxable Persons under Rail Transportation

B2B supplies fall under input tax credit exception. Business owners are expected to follow the invoice matching concept to claim ITC. IRCTC records the GSTIN of all

businesses that businesses which avail transportation services for record verification.

Unregistered Persons under B2C

All B2C supply records are maintained by the IRCTC and GST is applicable on all B2C activity.

Exemption under GST for Transportation of Goods

The following goods are exempt from GST

Relief material for areas struck by disasters
Military/Defence personnel equipment
Newspapers/magazines recognised by the Registrar of Newspapers
Railway equipment and materials
Agricultural produce
Manure (Organic)
Agricultural products
Essential commodities (Milk, food grain and salt)

Reduction of GST Rates for Rail Equipment Manufacturers

With the latest GST notification, the following entries have been inserted as of October 1, 2019. Manufacturers of the following equipment will be eligible for input tax credit following the GST council’s approval of increasing GST from 5% to 12% in the latest GST update.

Rail locomotives that are powered by external sources of electricity or by using electric accumulators.
Rail locomotives, locomotive tenders, steam locomotives, diesel-electric locomotives and their tenders.
Self-propelled vans, trucks, tramway coaches.
Maintenance and service vehicles, non-self-propelled vehicles like trucks, track inspection vehicles.
Railway and tramway passenger coaches, post-office coaches and other special purpose railway/tramway coaches.
Railway or tramway wagons and goods fans (non self-propelled)
Axles, wheels, bogies, Bissel-bogies and other parts of railway locomotives
Railway tracks, fixtures, safety signalling tools, traffic control equipment, parking facilities, port installations, airfields, roads for railway purposes.

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Frequently Asked Questions

Common questions about GST on Indian Railways Tickets and Goods Transportation.

GST, or Goods and Services Tax, is a comprehensive indirect tax that has been implemented in India, including for the Indian Railways. Both passenger transportation and goods transportation services provided by the Indian Railways are subject to GST.

Prior to GST, a 15% service tax was applicable on 30% of the ticket fare (effective rate of 4.5%) due to a 70% abatement. Under GST, passengers now pay a flat 5% GST on the full ticket price, which is slightly higher than the previous effective rate.

Yes, businesses can claim input tax credit (ITC) for the GST paid on railway passenger transportation if the travel is for business purposes. This helps reduce the overall expenditure for businesses using the Indian Railways.

The GST rate for goods transportation by the Indian Railways is 5%. However, businesses can effectively reduce the rate to 4.5% by claiming input tax credit (ITC).

Yes, certain goods are exempt from GST when transported by the Indian Railways. These include relief materials for disaster-struck areas, military/defense equipment, newspapers/magazines, railway equipment and materials, agricultural produce, manure, agricultural products, and essential commodities like milk, food grains, and salt.

Yes, the GST Council has recently increased the GST rate from 5% to 12% for manufacturers of certain rail equipment, including locomotives, self-propelled vans, railway coaches, wagons, and goods vans. This change allows these manufacturers to claim input tax credit.

Businesses are required to follow the invoice matching concept to claim input tax credit (ITC) for rail transportation services. IRCTC records the GSTIN (Goods and Services Tax Identification Number) of businesses availing transportation services for record verification and invoice matching.

Yes, the GST rates for goods transported vary based on the category of goods. Common goods and services are taxed at 12%, standard goods and services at 18%, special goods and services at 28%, and luxury goods and services at 28%. Essential goods and services are exempt from GST or taxed at a nil rate.

For B2C rail transportation services, GST is applicable on all transactions. IRCTC maintains records of all B2C supply transactions, and consumers are required to pay the applicable GST rate.

Yes, the article mentions that there is no input tax credit available for the transportation of goods via Goods Transportation Agencies. This implies that businesses cannot claim ITC for goods transportation services availed from such agencies.