Easy to Calculate GST (Tax) on Train Cancellation Ticket

Indian Railways used to fulfil the requirement of various people in the year. The demand for train tickets around the festival rises.

The people are often booking the tickets in advance to confirm their seats. But some people need to cancel their tickets for the amendment in their plan or other issues might happen at the last minute.

A cancellation fee shall get levied by the Indian Railways when one cancels the confirmed tickets. The cancellation process is costlier since the same would draw GST.

As the finance ministries’ tax research unit has issued a circular dated 3rd August, a GST will be imposed on the revocation of train tickets or hotel bookings.

The circular specifies that the booking of the train ticket would be the contract where the service provider pledges for furnishing the services.

If the passenger branches the contract through the cancellation of the train ticket then the service would be compensated with a small amount obtained as a revocation charge.

What are Revocation Charges?

As the revocation charge would be the payment rather than the breach of the contract then the same shall draw GST as per the circular of the finance ministry.

Revocation charges of the railway tickets to the class shall draw GST on the identical rate as applicable to the travel class.

GST Rate on Cancellation First Class AC Train Ticket

For instance, a 5% GST would be imposed on first-class or air-conditioned coach tickets, hence the GST on the identical rate would be applicable to the revocation charges.

Rs 240 would be the Indian Railway cancellation charge for an AC first class or AC executive class ticket 48 hours prior to the departure of the train.

Read Also: GST Impact on Indian Railway Network

GST Rate on Train Ticket Cancellation Fee

A 5% GST would be paid when a person books a ticket.

As per the circular of the Finance Ministry, a passenger shall indeed be required to furnish the identical GST amount on the revocation of the GST charges. Thus for the cancellation of the confirmed AC first-class ticket, a passenger should pay Rs 12 more (5% of Rs 240) for GST.

Railway, confirmed for AC 2-tier tickets Rs 200 is a cancellation fee and for AC 3-tier tickets Rs 180 would be levied if they would get cancelled 48 hours prior to the departure of the train.

When it seems that there would be a revocation of the confirmed ticket prior to 48 hours to 12 hours from the scheduled departure of the train then 25% of the amount of the ticket would be taken as a cancellation fee.

50% of the booking amount would be levied towards the cancellation, of confirmed tickets between 12 hours and 4 hours.

5% GST would get levied on the cancellation charges of the ticket irrespective of the situation. On the cancellation of the 2nd class sleeper tickets, there is no GST on the cancellation.