Service charge on online train tickets may return from July

Bookings led to a revenue loss of ₹219.05 crore to the IRCTC

FOR DAILY:COIMBATORE, 14/04/2008: TRAVEL MADE EASY: An Indian Oil Retail Outlet on Mettuppalayam Road providing the facility of online train ticket booking facility. Photo:M_Periasamy.(Digital)

The Railway Ministry has sought the Finance Ministry’s permission to resume levying service charge on online tickets from July this year.

“We have written a letter to Finance Ministry seeking resumption of service charge on online tickets beginning July,” said a senior Railway Ministry official, on condition of anonymity. “We have informed the Finance Ministry that the service charge on e-tickets and i-tickets was withdrawn in November to promote digital transactions during demonetisation.”

The Indian Railway Catering and Tourism Corporation (IRCTC) levied service charges of ₹20 on each sleeper class e-ticket and ₹40 on each AC class e-ticket booked through its website, till it was instructed to withdraw these charges from November 23, a fortnight after the demonetisation of high-value currency notes.

The service charge of ₹80 on each i-ticket for sleeper class and ₹120 on each i-ticket for all other classes was also taken back. The Railways took this measure in a bid to promote online booking of tickets during demonetisation of ₹500 and ₹1,000 old currency notes. The service charge was initially discontinued till December 31 and later extended till March 31. Recently, the service charge waiver was extended till June 30 on Finance Ministry’s advice.

Mounting losses

Although the cashless reservation went up from 58% last year to 68%, the revenue loss mounted as IRCTC shares half of the service charge earnings with the Indian Railways.

From November 23-March 31 this year, 7.89 crore tickets were booked online which led to a revenue loss of ₹219.05 crore to the IRCTC, a senior Railway Ministry official said.

“We have projected a 5% increase in e-ticket booking in the next financial year. The expected loss of revenue to IRCTC on account of non-collection of service charge may be around ₹600 crore if the service charge remains withdrawn,” another top Railway Ministry official said.

The IRCTC also sought compensation from the Railway Ministry as service charge was its primary source of earnings. However, the government has not yet compensated IRCTC for the losses incurred due to the service charge waiver. In 2015-16, IRCTC earned ₹551.49 crore from service charge which constituted around 36% of its annual revenue.