The government will levy 5% Goods and Services Tax on food items and beverages supplied by the Indian Railways in trains, platforms and stations, the Finance Ministry said on Friday.
The GST, which introduced a single-tax system on the supply of goods and services in India since July 1, has four tax slabs – 5%, 12%, 18% and 28%.
The Finance Ministry had written to the Railway Board on March 31 about the tax to clarify doubts in the matter. It said this new levy will bring uniformity to the GST rate applicable on food items and drinks available in trains and on platforms.
“It has been clarified...that the GST rate on the supply of food and drinks by the Indian Railways, or Indian Railways Catering and Tourism Corporation Ltd, or their licensees, whether in trains or at platforms, will be 5% without input tax credit,” the Finance Ministry said in a statement.
The Indian Railways Catering and Tourism Corporation is the subsidiary of the Indian Railways that handles its catering and ticketing operations.
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