Tax Rate On Railway Transportation

Rahul Rai
watch_later 3 years, 9 months ago

What is the tax rate on transportation services provided using rail? Whether input tax credit is available?

Please specify tax rate applicable to:

  • Transportation of goods,
  • Transportation of passengers
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1 Answer

Pulkit Sharma watch_later 3 years, 9 months ago

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
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