The Ministry of Finance on Friday said a 5% GST will be levied on drinks and food items and beverages supplied by the Indian Railways in trains, platforms and stations.
The GST, which introduced a single-tax system on the supply of goods and services in India since 1st July, has 4 tax slabs that are 5%, 12%, 18% and 28%.
The Ministry of Finance has sent a letter to the Railway Board on 31st March about the tax to clarify doubts in the matter.It said this new levy will bring uniformity in the rate of GST applicable to food items and drinks made available at trains, platforms or railway stations.
It has been stated in the statement that 5% input tax credits (ITC) platforms were made available on GST rates, food and drinks on supply by Indian Railways or Indian Railway Catering and Tourism Corporation Limited or their licensed holders. The new tax system GST started in the country from 1st July 2017.
The Indian Railways Catering and Tourism Corporation is the subsidiary of the Indian Railways that handles its catering and ticketing operations.
Earlier in March, IRCTC had introduced POS(Point of Sale) handheld machines in trains because after many passengers had registered complaints of train vendors overcharging passengers.
Immediately after this, IRCTC issued an official statement, in which the availability of POS machines at railway stations, thus helping passengers remain aware of relevant pricing information.