Cancellation Of Train Ticket Gets Costlier As Government Introduces GST On Some Categories

As per a circular by Ministry of Railways and Department of Revenue (Ministry of Finance) issued earlier this month, GST shall be applicable on payments in the nature of liquidated damage, compensation, penalty, cancellation charges, late payment surcharge etc.

The circular mentioned an example for more clarification on GST applicable on train cancellation. For example, cancellation charges of railway tickets for a class would attract GST at the same rate as applicable to the class of travel (i.e., 5% GST on first class or air-conditioned (AC) coach ticket and nil for other classes such as second sleeper class).

For example, the GST rate is 5% for first-class or AC coaches, while cancellation fee for this category is ?240 (per passenger). Therefore, the total cancellation cost will be ?252 ( ?12 tax+ ?240) for first-class/AC compartments. However, there is no GST on other categories, including second sleeper class, as per various media reports.

So overall, cancellation of tickets, which earlier used to attract cancellation charges wherever applicable, will now get costlier with the additional levy of GST.

IANS

Also, the circular mentioned that GST for the amount forfeited in the case of non-refundable ticket for air travel or security deposit or earnest money forfeited in case of the customer failing to avail the travel, tour operator or hotel accommodation service or such other intended supplies should be assessed at the same rate as applicable to the service contract, say air transport or tour operator service, or other such services.

Also Read: PVR Raises Ticket Prices By Up To 23%

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