Service tax exemption on e-tickets for trains extended till March 2018

The service tax exemption was started post demonetization in November last year and likely to cause an annual revenue loss of approximately Rs 500 crore to the public transporter.

Published: 03rd October 2017 09:08 PM  |   Last Updated: 04th October 2017 08:15 AM   |  A+A-

EPS file image used for representation only

By Express News Service

NEW DELHI:  The Centre has decided to extend by six months service tax exemption on train tickets booked online by passengers. It was started post demonetization in November last year and likely to cause an annual revenue loss of approximately Rs 500 crore to the public transporter.

“The Railway Board has decided that the exemption from payment of service charge on booking of e-ticket/i-ticket granted upto September 30, 2017 be extended upto March 31, 2017 or review of the exemption id advised earlier,” said an order by Vikram Singh, Director Passenger Marketing, Railway Board. 

The service charge exemption was announced in November 2017 after demonetization to encourage passengers to opt for online mode of transactions. Passengers booking e-tickets through Indian Railway Catering and Tourism Corporation (IRCTC) web portal were exempted from paying Rs 20 to Rs 40 per booking for non AC and AC tickets.

The order was issued on November 23 till March 2017 and extended twice until June and against till September 2017.  

About one-third of Rs 1500 crore revenue of IRCTC in 2016 came from booking of tickets and monthly income from service charge to IRCTC was Rs 40 crore. IRCTC has appealed to the finance ministry to reimburse the loss of the revenue due to the waiver.

 “The cash-strapped railways was facing a huge loss due to the waiver of service charge and now the finance ministry has agreed to reimburse the losses that we will have,” said official sources.

Railway has been facing an operational loss of Rs 36000 crore annually owing to subsidized passengers fare. Passenger fare has not been increased in last three years but for the dynamic pricing system last year. 

Earlier, railways were also considering to review 53 concessions it offers to passengers in various categories like divyang, senior citizens, students and defence personnel among others that puts a burden of Rs 1600 crore on the public transporter.   


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