With the exit of Trinamool Congress from UPA, the Finance Ministry has decided to levy service tax on AC and freight services fares from October 1. The decision for levying service tax on AC classes and freight and auxiliary services was taken yesterday at a meeting between Railway Minister C.P. Joshi and Finance Minister P. Chidambaram. Passengers travelling in AC classes were brought under service tax from July this year as per the Finance Bill 2012 but the levy had since been kept in abeyance because of opposition by the TMC.
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