New GST on Train Tickets: AC, Non-AC, and Class-wise Tax
If you’re traveling by train in India, especially in AC classes or premium categories, GST is part of your ticket cost. Indian Railways, like airlines, applies GST on certain types of tickets. In this blog, we’ll explain how gst on train tickets works, what classes are taxed, and what to know about cancellations and refunds.
New GST Rate on Railway Tickets in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for railway tickets (no compensation cess).
New GST in Railway Tickets
| Train Class | New GST Rate | GST Applicable? |
|---|---|---|
| AC First Class / Executive Class | 5% | Yes |
| AC 2-Tier, 3-Tier, Chair Car | 5% | Yes |
| Sleeper Class, Second Sitting (2S) | 0% | No (Exempt) |
| General Class (Unreserved) | 0% | No (Exempt) |
Old GST in Railway Tickets: When Does It Apply?
(Old GST Rates – Applicable Until 21st September)
GST is applicable only on certain categories of railway travel. The rate depends on the class of travel.
| Train Class | GST Rate | GST Applicable? |
|---|---|---|
| AC First Class / Executive Class | 5% | Yes |
| AC 2-Tier, 3-Tier, Chair Car | 5% | Yes |
| Sleeper Class, Second Sitting (2S) | 0% | No (Exempt) |
| General Class (Unreserved) | 0% | No (Exempt) |
So, if you’re traveling in AC, gst in railway ticket is 5%, while there’s no GST on non-AC classes.
GST on Train Ticket Booking
GST is applied during railway ticket booking—both online (IRCTC) and offline. It is:
- Automatically calculated and shown on the final fare
- Included in the total ticket price
- Applicable only when booking AC or Executive class tickets
So, if you’re making a railway ticket booking for AC 2-tier, your ticket will show a separate GST component at 5%.
GST on Train Ticket Cancellation
Yes, GST is also involved during ticket cancellations—but only for AC classes.
Key rules:
- GST is deducted from the cancellation charges
- Refund is issued after deducting GST-inclusive cancellation fee
Example:
- AC 3-tier ticket: ₹1,000
- Cancellation charge (with GST): ₹60 (₹57 + ₹3 GST)
- Refund issued: ₹940
So, you don’t get back the GST on the cancellation fee. The gst on train ticket cancellation is retained as part of the charge.
Input Tax Credit (ITC) on Train Tickets
If you are a business traveler or booking through a company:
- You can claim Input Tax Credit on GST paid on AC train travel
- Your company must be GST-registered
- Invoice should include your GSTIN and proper HSN/SAC code
The SAC Code for passenger transport by rail is 9964.
Conclusion
Knowing the gst on train tickets helps you understand your fare breakup better. Whether you travel frequently or manage bookings for a company, being aware of these GST rules helps you save time and claim eligible credits .
I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike.
Frequently Asked Questions
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Is GST applicable on all railway tickets?No. GST applies only to AC and Executive class tickets at 5%. Non-AC classes are exempt.
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What is the GST on railway ticket booking?For AC classes, 5% GST is charged and shown in your ticket summary.
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Is GST refunded if I cancel my ticket?No. GST is part of the cancellation fee and is not refunded.
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Can I claim GST input if I travel for business?Yes, if you're GST-registered and the ticket invoice includes your GSTIN.
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What happens when booking via IRCTC or travel agents?GST is automatically included during online booking and is the same for IRCTC or agent-based bookings.