IRCTC passes service tax on to passengers

Come April and the Indian Railways' online ticket booking portal IRCTC will start levying service tax on service charge for e-tickets booked through it.
 

A letter to this effect was issued on February 27 by the railway ministry. The Indian Railway Catering and Tourism Corporation 

(IRCTC) had on January 31 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 sources said service tax would be levied from April 1.

The 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. 1 for SL and Rs. 2 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 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.

"The move is expected to give the IRCTC additional revenue of approximately Rs. six lakh per day," said Kundu.

The ministry had earlier decided to levy 12% service tax on 30% of fare (equivalent to 3.6% on the total fare), higher education cess of 1% on service tax (equivalent to 0.036% on total fare) on the high-class passenger tickets including those who can avail of concessions like senior citizens, children and the physically challenged from October 1, 2012. (Hindustan times)