Tax rate on railway transportation

Transportation of goods or passenger by rail are taxed at 5% with ITC of input services.

Transportation of goods in a container are taxed at 12% with full ITC.

However following services are exempted from tax:

Service of transportation of passengers, with or without accompanied belongings, by—

1. Railways in a class other than—
   1. First class; or
   2. An air-conditioned coach;
2. Metro, monorail or tramway;
3. Inland waterways;
4. Public transport, other than predominantly for tourism purpose, in a vessel between places located in India; and
5. Metered cabs or auto rickshaws (including E-rickshaws);

Services by way of transportation by rail or a vessel from one place in India to another of the following goods:

1. Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
2. Defense or military equipment;
3. Newspaper or magazines registered with the Registrar of Newspapers;
4. Railway equipment or materials;
5. Agricultural produce;
6. Milk, salt and food grain including flours, pulses and rice; and
7. Organic manure