IRCTC to bring back service charge on online ticket booking from Sep 1

Passengers may have to pay Rs 15 and Rs 30 for non AC classes and AC classes as service charge from September 1

The big demonetisation sops for rail travelers on booking of online train tickets are set to end on September 1. 

The government has allowed the Indian Railway Catering and Tourism Corporation (IRCTC) to bring back service charge on online ticketing, as it plans to come out with the initial public offering (IPO) of its tourism and catering arm. To push online transactions after demonetisation, the ministry of finance had removed the charges levied by IRCTC on passengers for booking railway tickets online as service charge. The charges were Rs 20 per ticket for non-air conditioned (AC) classes and Rs 40 per ticket for AC classes excluding service tax. The decision on November 22, 2016 had wiped out the entire revenue of the railway arm to the tune of around Rs 500 crore per annum for the last two years. 

However, from September 1 onwards, IRCTC is planning to charge convenience fee of Rs 15 and Rs 30 on the passengers for the booking railway tickets online for non AC classes and AC classes, respectively. For payment made through UPI/BHIM applications, the convenience fee will be Rs 10 and Rs 20 non AC classes and AC classes, respectively, the company said in its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI) on Thursday. The company said till the software for UPI/BHIM is developed, payment through UPI/BHIM will be incentivised by offering prizes through lottery on regular basis. 

Following the decision, the finance ministry had said in July 2017 that it will partially reimburse for the losses that the company has suffered because of the demonetisation sops. Later, it reimbursed only Rs 80 crore and Rs 88 crore for the financial years 2017-18 and 2018-19 respectively. 

The sop plans took a u-turn after a decision by the Department of Economic Affairs on July 19 this year to withdraw the reimbursement of expenses, while advising the ministry of railways to decide on the future course. Following this, the Railway Board had authorised IRCTC to decide on the service charges to be levied on the passengers for booking railway tickets online.

The government is planning to offload around 12 per cent stake through the IPO of IRCTC, which is likely to fetch around Rs 6,000 crore. During the current financial year, so far Rs.12,357.49 crore has been obtained through disinvestment transactions, as the government is targeting around Rs 1.05 trillion for the entire financial year.

IRCTC operates one of the most transacted websites, www.irctc.co.in, in the Asia-Pacific (APAC) region with transaction volume averaging at 25 million per month and 7.2 million logins a day. Over 1.4 million passengers travel on a daily basis of which 71.42 per cent book their tickets online.