GST will be levy on cancelled of confirmed train ticket

GST will be levy on the cancelled of confirmed train ticket.

• According to a CBIC circular released (GST circular no. 11/2022) : Cancellation of confirmed railway tickets will now incur GST on cancellation fees for the specific class of travel.

Why is mean of GST on cancellation?

• As per the CBEC of Tax Research Unit (TRU), – clarify that ticket of train booking is a “contract” under service provider (via Indian Railways or IRCTC) that is promises the supply of services to the consumer.
• “The service provider is reimbursed with small amount of money, which is collected as a cancellation fee, when the passenger breached the contract. The cancellation fee is attract GST, because of above cancellation fees is payment not a breach of the contract, as mentioned and explained under the CBEC notification.
• The GST rate remains the same at the time of cancelation and booking of ticket for a specific class of passenger/berth. Let’s have a look at an example; first-class or air-conditioner compartments, for instant take rate of GST @ 5% and the cancellation charge is 200. (Per berth). As a result, the total cancellation fee for first-class/AC compartments will be Rs 210 (Rs 10 tax @ 5%). Other categories, such as second sleeper class, are exempt from GST.

What are Conditions of booking cancellation?

• There are Few conditions need to be in mind while cancellation of the Ticket.
  The cancellation fee of Rs 210 is applicable if the cancellation of booking is done at least 48 hours before the trains schedule time for departure.

For details Reference of Circular : Download the Circular

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