GST
TRT-2025-
Date:-29-08-22
In:-
Issue Favourable to Tax Payer ?:-
- The Circular – issued by the ministry’s Tax Research Unit (TRU), – explains that booking of tickets is a ‘contract’, under which the service provider (IRCTC/Indian Railways) promises to provide services to the customer.
- “When the contract is breached by the passenger, the service provider is compensated 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 said.
- For canceling bookings of a particular class, the GST rate will be the same as that applicable while booking seats/berths for that class, it added. For example, the 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
- Conditions for booking cancellation:
- However, the aforementioned ₹240 cancellation charge is applicable when the ticket is canceled 48 hours or more before the scheduled departure of the train.
