Central Government has imposed service tax of 6 percent towards AC buses belonging to the state transport corporations. The new service tax rule has forced RTC to shift the burden onto passengers.

The Telangana State Road Transport Corporation (TSRTC) managing director G.V. Ramana Rao said the corporation was running in losses and cannot take the burden of service tax.

Hence, passengers traveling in the TSRTC’s 300 AC buses will have to pay nearly 6% more as service charge from Monday (June 27th, 2016). The money, estimated at Rs 10 crore per year, will go to the Centre.

Meanwhile, TSRTC on Thursday hiked fares, up to 10 percent on urban services of express and higher category buses. Announcing the decision at a press conference, Telangana First Transport Minister P. Mahender Reddy said the new fares will come into effect on June 27. The hike is nominal in rural services, hiked fares will fetch the corporation Rs 286 crore annually, the minister said.

After the hike, fares would be, per kilometer, 87 paise for ‘Express’ services, 98 paise for ‘Deluxe’, 116 paise in ‘Super Luxury’ buses, 146 paise for Indra service, 171 paise in ‘Garuda’ buses and, according to a Government release.