Understand the GST on Train Tickets: A Complete Guide

India's Goods and Services Tax (GST) regime has brought clarity, uniformity, and transparency in the taxation system across various sectors. One such area where GST plays a significant role is the Indian Railways – the lifeline of millions. Whether you are a daily commuter, a business traveler, or someone planning a vacation, it is important to understand how GST on train tickets affects your travel expenses.

In this blog, we will cover all the essential aspects related to GST on train tickets, including applicable rates, exemptions, input tax credits, the impact on businesses, and the relevance of GST registration for frequent rail users or businesses.

What is GST?

Before diving into the specifics of GST on rail travel, let’s briefly understand what GST is.

Goods and Services Tax (GST) is a unified, destination-based indirect tax levied on the supply of goods and services. Introduced in India on July 1, 2017, GST has replaced several indirect taxes like VAT, service tax, excise duty, etc. It is categorized into three types:

• CGST – Central GST collected by the central government

• SGST/UTGST – State or Union Territory GST collected by respective state or UT governments

• IGST – Integrated GST collected by the central government for inter-state transactions

The GST system aims to bring uniform taxation across the country and reduce the cascading effect of taxes.

GST on Train Tickets: Overview

The Indian Railways, operated by the Ministry of Railways, is one of the largest railway networks in the world. Given its vast reach and essential role, train services are partially brought under the GST ambit. This means that certain categories of train tickets attract GST, while others are exempt.

GST Applicability on Different Train Classes

The GST on train tickets depends on the class of travel:

Class of Travel	GST Rate	Applicability
AC First Class	5%	With ITC Exemption
AC 2-Tier	5%	With ITC Exemption
AC 3-Tier	5%	With ITC Exemption
AC Chair Car	5%	With ITC Exemption
Executive Class (Shatabdi/Rajdhani etc.)	5%	With ITC Exemption
Sleeper Class (Non-AC)	NIL	Exempt
Second Class (General)	NIL	Exempt

Key Points:

• GST is applicable only on AC and First Class tickets.

• Non-AC classes such as Sleeper and General Class are exempt from GST.

• The rate of GST on AC classes is 5%, but Input Tax Credit (ITC) is not allowed.

• Booking through online portals like IRCTC includes GST in the ticket fare.

  
  

GST on Train Tickets: Services Covered

Besides passenger travel, Indian Railways provides several other services that are taxable under GST:

1. Parcel and Freight Services

• GST on transportation of goods by rail is 5% (without ITC) or 12% (with ITC) depending on the contract.

• Transportation of certain essential goods like agricultural produce is exempt.

2. Catering Services in Trains

• GST on catering services provided in trains is charged at 5% without ITC if the service is under IRCTC or Indian Railways.

• If catering is outsourced to third-party vendors, GST may vary depending on the type of service.

3. Platform Tickets and Retiring Rooms

• Platform tickets are generally exempt from GST.

• Retiring room bookings (similar to hotel stays) attract 12% or 18% GST, depending on the room tariff.

  
  

How GST is Charged on Train Tickets

When you book a train ticket, either online via IRCTC or at a railway reservation counter, the GST is automatically included in the ticket price for eligible classes. Here's how it works:

Example:

Suppose you're booking an AC 2-tier ticket costing ₹1000. The breakdown would be:

• Base Fare: ₹952.38

• GST @5%: ₹47.62

• Total Ticket Fare: ₹1000

The GST component is clearly mentioned in the ticket details.

GST Registration and Train Travel: When is it Relevant?

You might wonder, why should someone worry about GST registration while booking train tickets? The answer lies in the business use of train travel.

1. Businesses Claiming Travel as Expense

If your company sends employees on official travel via train (AC classes), you can treat the ticket cost as a business expense. However, Input Tax Credit (ITC) on train tickets is not allowed since GST on train tickets falls under the category of non-creditable expenses.

2. Logistics and Goods Transportation

If you're a business engaged in freight movement via Indian Railways, GST becomes more relevant. Here, GST registration is mandatory if:

• Your annual turnover exceeds the prescribed limit (₹40 lakh for goods, ₹20 lakh for services)

• You want to claim Input Tax Credit on freight charges where applicable

• You are involved in inter-state transportation of goods

Thus, in freight and logistics, GST registration allows you to comply with the law and optimize your tax outflows.

Exemptions and Special Cases

1. Subsidized Tickets

Certain subsidized tickets like those issued to defense personnel, physically challenged individuals, or senior citizens may have partial or full exemption.

2. Religious Pilgrimages

If the train service is exclusively for religious pilgrimages organized by state governments, the GST may be exempt under specific notifications.

3. Group Bookings for Educational Tours

Educational institutions booking train travel for students may be exempt if the travel is part of the curriculum and supported by documentation.

How to Check GST on Train Tickets?

If you're unsure whether GST is applicable to your train ticket, follow these steps:

1. Check Ticket Class: GST is applicable only to AC and First Class.

2. Check Fare Breakdown: On IRCTC or printed ticket, look for a line item labeled as “GST”.

3. GSTIN on Invoice: For corporate bookings, you can request the invoice with GSTIN to use for accounting purposes (though ITC is disallowed).

   
   

Claiming GST Input: Is it Possible?

For passenger transport services by rail, input tax credit is not available, even if GST is paid. This rule applies to both individual and business travelers. So even if your business is GST-registered, you cannot claim ITC for train ticket expenses.

However, for goods transport, if you opt for the 12% GST rate, ITC is allowed.

Benefits of GST for Indian Railways

While passengers may not get ITC benefits, the GST regime has improved operational transparency for Indian Railways. Some key advantages include:

• Ease of taxation with uniform GST across states

• Simplified accounting for large corporate users and logistic partners

• Improved digital tracking of tax collections through online bookings

  
  

Conclusion

Understanding GST on train tickets is important for both individual travelers and businesses. While regular passengers should be aware of the tax implications on their ticket prices, businesses should consider the impact of GST when it comes to logistics and freight services.

Although GST on passenger train tickets does not offer input tax credit, staying informed helps with better financial planning and compliance. For businesses that rely on Indian Railways for transporting goods, GST registration is not just mandatory but also beneficial for managing tax credits and legal obligations.

If you’re a business owner, transporter, or logistics manager and need assistance with GST registration or compliance, Online Legal India can guide you through the entire process — quickly, legally, and hassle-free.