Railways explains the new GST rules applicable on cancelling confirmed tickets

• Image Credit: Internet

• Aug 29, 2022 | Sourav Boruah

mso-fareast-font-family:"Times New Roman";mso-bidi-font-weight:bold">Digital
Desk: There have been no changes to the regulations regarding ticket
cancellation and refunds, according to the Railways Ministry. The fare and the
amount of GST (Goods and Services Tax) charged at the time of booking,
according to the ministry, will be fully refunded to the traveller when a
ticket is cancelled.

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mso-fareast-font-family:"Times New Roman"">The ministry referenced data in
accordance with earlier directives released in September 2017.

mso-fareast-font-family:"Times New Roman"">The ministry clarified the
cancellation fees, stating that the Railways would keep this amount (and any
relevant GST) in accordance with the return guidelines.

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mso-fareast-font-family:"Times New Roman";mso-bidi-font-weight:bold">The
ministry further clarified the rule by stating that it would only apply to
tickets purchased in first and business classes and that the GST was being
collected on the Finance Ministry's behalf.

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mso-fareast-font-family:"Times New Roman"">The Finance Ministry released
recommendations on August 3 regarding the application of GST to cancellation
fees for confirmed train tickets.

mso-fareast-font-family:"Times New Roman"">The Indian Railways, the service
provider in this matter, explained in the circular that purchasing tickets is a
"contract" under which the consumer is promised services by the
service provider, in this case, the Indian Railways. The circular said that the
cancellation fees for a class of train tickets will be subject to GST at the
same rate as that class.

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mso-fareast-font-family:"Times New Roman"">Understanding this rule using an
example, it would mean that the rate is 5 per cent GST for first-class or AC
coaches, while cancellation fee for this category is Rs 240 (per
passenger). Therefore, the total cancellation cost will be Rs 252 ( Rs
12 tax + Rs 240) for First Class / AC compartments. However, there is no
GST on other categories, including second sleeper class.