IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. Here’s Why

IRCTC Latest News Today: According to the notification, the cancellation charge for a first-class or AC coach ticket would attract 5 per cent GST, which is the rate imposed on the ticket.

IRCTC Latest News Today: Rail passengers, attention please. If you are planning to cancel confirmed rail tickets for AC and first class, you will have to pay more. As per a circular from the Finance Ministry, the cancellation of confirmed train tickets would now attract Goods and Services Tax (GST) of 5 percent. The Finance Ministry’s Tax Research Unit said the booking of tickets is a ‘contract’, under which the service provider (IRCTC/Indian Railways) promises to provide services to the customer.

According to the notification, the cancellation charge for a first-class or AC coach ticket would attract 5 per cent GST, which is the rate imposed on the ticket.

Apart from this, the Finance Ministry said the cancellation of air travel or hotel accommodation, where the cancellation charges would be taxed at the same GST rate as applicable to the principal service, would al-so attract 5 percent GST.

The Finance Ministry further said the cancellation charge is a payment instead of a breach of contract, so GST has to be paid.

“When the contract is breached by the passenger, the service provider is compen-sated with a small amount, collected as a cancellation charge. Since the cancellation charge is a payment, and not breach of contract, it will attract GST,” the notification read.

The ministry said for cancelling bookings of a particular class, the GST rate will be the same as that applicable while booking seats/berths for that class.

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