S. tax applicabiltiy on railway freight
This query is : Resolved
Anoop kumar Modi
(Querist)
16 November 2011
Can any one tell me the applicability on freight paid to railway??
CA Ayush Agarwal
(Expert)
16 November 2011
Yes, Now Onwards Its Applicable
Anoop kumar Modi
(Querist)
23 November 2011
can you please explain in bit details
22 July 2025
Sure! Here’s a bit more detail on service tax applicability on railway freight:
Background:
Earlier, service tax was generally not applicable on freight charged by Railways.
But after amendments, service tax applies on freight services provided by Railways, as per the category “Transport of goods by rail service.”
Key points:
Service tax is payable on freight charges collected by Railways for transporting goods.
This service tax is typically paid by the service provider (Railways).
The rate applicable is as per the service tax rate prevailing on transport services (historically 12% + cess, but check current rate as it may have changed or been subsumed by GST).
Freight for passenger trains is not subject to service tax.
This was before GST implementation — now GST applies on railway freight under integrated GST rules.
Why this was introduced:
To bring uniformity as road transport of goods was liable for service tax and rail freight was not, which created imbalance.
Background:
Earlier, service tax was generally not applicable on freight charged by Railways.
But after amendments, service tax applies on freight services provided by Railways, as per the category “Transport of goods by rail service.”
Key points:
Service tax is payable on freight charges collected by Railways for transporting goods.
This service tax is typically paid by the service provider (Railways).
The rate applicable is as per the service tax rate prevailing on transport services (historically 12% + cess, but check current rate as it may have changed or been subsumed by GST).
Freight for passenger trains is not subject to service tax.
This was before GST implementation — now GST applies on railway freight under integrated GST rules.
Why this was introduced:
To bring uniformity as road transport of goods was liable for service tax and rail freight was not, which created imbalance.
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