GST to be levied on cancellation of confirmed train ticket: Finance ministry

By, New Delhi
Aug 29, 2022 09:42 AM IST

The GST will be calculated on cancellation charges for the class of travel under which the journey was to be undertaken, the ministry said, adding that the rate will be the same as applicable for while booking tickets for that class.

Cancellation of confirmed train tickets, too, will now attract GST, on cancellation charges for that particular class of travel, according to a circular issued by the Ministry of Finance on August 3.

Representative Image
Representative Image

Why GST on cancellation?

The circular – issued by the ministry's Tax Research Unit (TRU), – explains that booking of tickets is a ‘contract’, under which the service provider (IRCTC/Indian Railways) promises to provide services to the customer.

“When the contract is breached by the passenger, the service provider is compensated with a small amount, collected as a cancellation charge. Since the cancellation charge is a payment, and not breach of contract, it will attract GST,” the notification said.

For cancelling bookings of a particular class, the GST rate will be the same as that applicable while booking seats/berths for that class, it added. For example, the rate is 5% for first-class or AC coaches, while cancellation fee for this category is 240 (per passenger). Therefore, the total cancellation cost will be 252 ( 12 tax+ 240) for first-class/AC compartments. However, there is no GST on other categories, including second sleeper class.

The full circular is available here.

Conditions for booking cancellation

However, the aforementioned 240 cancellation charge is applicable when the ticket is cancelled 48 hours or more before the scheduled departure of the train. You can read more details by clicking on this link.


    Follow the latest breaking news and developments from India and around the world with Hindustan Times' newsdesk. From politics and policies to the economy and the environment, from local issues to national events and global affairs, we've got you covered.

Story Saved
Live Score
Saved Articles
My Reads
My Offers
Sign out
New Delhi 0C
Friday, September 22, 2023
Start 14 Days Free Trial Subscribe Now
Register Free and get Exciting Deals