Economic Times reported that freight rates on certain goods like cement, iron ore and coal are going to rise by more than 5% with service tax and busy season charge coming into force from October 1.

A senior Railway Ministry official said that Indian Railways will realize 3.708% service tax and 2% busy season surcharge on goods loading from October 1. However, the 2% busy season surcharge will not be levied on food grains, flours, pulses and chemical manures.

The busy season charge will remain in force from October 1 to March 31.

As far as service tax is concerned, according to a notification, transportation of petroleum products, food grains, pulses, jute, fruits and vegetables are exempted from it.

However, service tax on all other goods like iron ore, coal, cement would be levied at the rate of 3.708%.

Service tax is 12.36% but after adjustment of 70% of this, it will effectively be 3.708% on freight services.

Source - Economic Times

(www.steelguru.com)