The Central Excise has slapped a notice to the Integral Coach Factory, Chennai asking it to pay Rs 3.65 crore as excise duty on Golden Chariot. According to the Central Excise certain work taken up by the ICF on the train attract the excise duty. The agreement is between the Ministry of Railways and  Karnataka State Tourism Development Corporation for running the luxury train.

Karnataka Government has taken serious exception to the notice issued by the Excise Department as this development has lead to the delay in launching the train service. I M Vittal Murthy, Secretary, Tourism Department and Chief Secretary M B Mahishi held a meeting with Governor Rameshwar Thakur in this regard on Thursday.

Mahishi has faxed a letter to K C Jain, Chairman, Railway Board, New Delhi drawing his attention to the opposition of Karnataka regarding levying of the excise duty. The CS has pointed out that the Central excise cannot be levied on two grounds - the rake is owned by the Indian Railways and operated by it. There is a revenue sharing arrangement between the Railways and the KSTDC. There has been no sale that has taken place between the Railways and the KSTDC.

The CS has also said that there was no central excise that was levied on Maharashtra for the Deccan Odyssey (luxury train) or on Rajasthan for the Palace on Wheels.

Vittal Murthy said, “the governor has assured to take up the matter to with the Railways. The Railways will remain the custodian of the Golden Chariot and the KSTDC will be only entertaining the guests on board and sell tickets. Nobody can own a train in this country. Then how can the excise department direct the ICF to pay the duty?”.

Discrimination
He further pointed out that Karnataka is being discriminated against while Rajasthan and Maharashtra did not pay such duty for the luxury train.

“Why the new rule for Karnataka? The notice has been issued to the IFC but still the burden will be on us. More than anything it is injustice done to Karnataka. Because of the excise duty issue, we have not been able to bring the train to Karnataka”, he added.

Still he exuded confidence that the luxury train would reach Bangalore by January 27. “The train is completely ready. Certain minor interior work will be done once it reaches the State. Hope to inaugurate it at least by this month-end and the commercial operation may begin in March,” he said.

The tariff has been fixed at $350 a day and Luxury Trains, a ticketing agency, has commenced booking seats in Delhi and Switzerland. The package offers a travel time of six nights and 7 days, Vittal Murthy said.