Bhubaneswar/New Delhi: Rail travellers can now heave a sigh of relief as the Centre has decided to do away with service tax on train tickets booked online till March 2018.
The deadline for tax exemption which was to end on September this year has been extended till March next year.
“The Railway Board has decided that the exemption from payment of service charge on booking of e-ticket/i-ticket granted upto September 30, 2017 will be extended upto March 31, 2018 for review of the exemption it advised earlier,” a directive by Vikram Singh, Director Passenger Marketing, Railway Board said.
The decision to exempt the tax was announced in November 2016 after devaluation of high value currency notes to encourage passengers for more online transactions. The deadline for the exemption was to end after March 2017 but was extended twice firstly until June and later again till September 2017.
Passengers booking e-tickets through Indian Railway Catering and Tourism Corporation (IRCTC) web portal have been exempted from paying Rs 20 to Rs 40 per booking for non AC and AC tickets.
About Rs 500 crore of IRCTC revenue in 2016 has come from booking of tickets and monthly income from service charge was Rs 40 crore.
The Ministry of Railways has been facing an operational loss of Rs 36000 crore annually due to subsidized passenger fare which has not been increased in last three years except for the dynamic pricing system last year.