According to the circular issued by the Tax Research Unit of the Finance Ministry on August 3, now GST will be charged on cancellation of train tickets and cancellation of hotel bookings.
New Delhi: Indian Railways is available throughout the year, that is, always, to travel from every corner of the country to every corner. The demand for train tickets also increases wildly during the festive season, and to get a confirmed seat, people book tickets in advance much in advance. However, there are many people who have to postpone or cancel their journey due to some kind of busyness or problem, due to which they have to cancel the confirmed ticket as well. When a confirmed ticket is cancelled, Indian Railways charges a cancellation fee, and now canceling a confirmed ticket will be more expensive as it attracts Goods and Services Tax (GST). Is.
According to the circular issued by the Tax Research Unit of the Finance Ministry on August 3, GST will now be charged on cancellation of train tickets and cancellation of hotel bookings.
The circular states that booking a train ticket is a contract in which the service provider, ie the service provider, offers to provide a service.
When this contract is terminated by cancellation of the ticket by the passenger, a small amount is compensated to the service provider, which is charged as cancellation fee. According to the circular of the Ministry of Finance, since the cancellation fee is a payment made against cancellation of a contract, it will attract GST.
The cancellation charges on railway tickets of any class will attract GST at the same rate as the tickets booked for that class.
For example, 5% GST is levied on booking of first class and air-conditioned coach tickets, so the cancellation fee for cancellation of tickets for this class will also attract 5% GST.
Indian Railways levies a cancellation fee of Rs 240 for cancellation of AC First Class and AC Executive Class tickets, if the ticket is canceled 48 hours before the departure of the train. While booking these tickets, the passenger has to pay 5% GST. According to the new circular of the Ministry of Finance, the passengers will now have to pay GST at the same rate on the cancellation fee, so on cancellation of the confirmed AC ticket, the passenger will have to pay an additional Rs 12 (five per cent of Rs 240) as GST.
For cancellation of AC 2-Tier ticket 48 hours or more before the commencement of journey, Rs.200 as cancellation fee and Rs.180 as cancellation fee for AC 3-Tier ticket is levied. If the ticket is less than 48 hours from the start of the journey, but more than 12 hours are left, then 25% of the ticket price is charged as cancellation fee. Similarly, if a ticket is canceled less than 12 hours but more than 4 hours before the scheduled departure of the train, 50% of the ticket price is charged as cancellation fee.
In these situations, GST will also be levied at the rate of five per cent on the cancellation fee for cancellation of the ticket. But remember, no GST will be charged on cancellation of second class sleeper ticket.
