Parliamentary Panel suggests sharing of service tax with railways

A Parliamentary Panel headed by TMC MP and former Railway Minister Dinesh Trivedi, has suggested sharing with Railways the service tax paid on passenger fares on specified classes and freight which is collected by Finance Ministry and pursuing the matter vigorously with the authorities concerned.

The panel in its report said that though several requests have been made to the Finance Ministry for exemption from payment of service tax on freight and fare, these were not agreed by the Ministry. It noted that service tax on specified classes of passenger and freight was to the tune of Rs 1478.10 crore and Rs 3449.34 crore during the financial years (FY) 2012-13 and 2013-14, respectively.

The committee’s report submitted to the Lok Sabha Speaker noted that the concessions given by the Railways on various categories should also be taken up with the ministries concerned and strongly favoured that the concessions given by the public transporter should be reimbursed to the Railways.

The panel has asked the railways to focus on completion of long-pending works to fulfill the objective of providing rail service to various parts of the country, noting that as on April 2016, the railways has 495 ongoing/pending projects involving new lines, gauge conversion, doubling and electrification worth Rs 3,61,772 crore. The report underscored the fact that these projects are important to meet the major challenges being faced by the railways relating to lack of capacity as it results in increasing load on railway infrastructure, compromising safety and lowering speed. Further, on the proposed joint venture with state governments, the committee has urged the railways to have a relook at the share of funds to be contributed by the backward, underdeveloped, hilly and far-flung states expeditiously.