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Service tax should be shared with railways: Parl panel

A Parliamentary Panel 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.

In its latest report, the Standing Committee on Railways has 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 2012-13 and 2013-14, respectively.

Though several requests have been made to Finance Ministry for exemption from payment of service tax on freight and fare, these were not agreed to by the Ministry, the report submitted to the Lok Sabha Speaker said.The Committee, headed by TMC MP and former Railway Minister Dinesh Trivedi, has also noted that the concessions given by the Railways on various categories should also be taken up with the ministries concerned.

It also strongly favoured that the concessions given by the public transporter should be reimbursed to the Railways. Taking note of the practice of payment of dividend by the Railways, the committee suggested to revisit the issue with Finance Ministry.

Observing that railway’s internal generation was almost negligible, it said that the national transporter was dependent upon gross budgetary support (GBS) which is a loan from general exchequer for their projects. 
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