IRCTC to charge Service Tax on e-tickets from April 1, 2013

According to news reports, the Indian Railway Catering and Tourism Corporation (IRCTC) will start levying Service Tax on service charge for e-tickets booked through its portal, as per The Hindustan Times report. A letter to this effect was issued on February 27, 2013 by the Ministry of Railways. According to IRCTC sources, Service Tax would be levied from April 1, 2013. IRCTC had on January 31, 2013 sought permission to levy Service Tax, as applicable, on customers in addition to the existing service charge levied on booking of e-tickets.

The Ministry’s letter says the “matter has been examined and the said proposal of IRCTC to transfer the liability incurred on account of imposition of Service Tax on the service charges levied by IRCTC to the customers has been agreed to”.

IRCTC levies a service charge of Rs 10 per e-ticket in case of sleeper class (SL) and second sitting and Rs 20 per e-ticket in case of all other classes (1AC, 2AC, 3AC, CC, FC) irrespective of the number of passengers on an e-ticket.

“It’s going to be a very nominal hike – Rs one for SL and Rs two for AC classes,” said Pradeep Kundu, PRO, IRCTC. “Till now, the IRCTC was bearing the cost of Service Tax but now it was decided to charge the same from passengers,” he added. “The move is expected to give the IRCTC additional revenue of approximately Rs six lakh per day,” informed Kundu.

The IRCTC records a sale of around 4.5 lakh ticket a day, making it one of the largest e-commerce sites in the world. Nearly 12 lakh tickets are booked with Indian Railways every day.

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