GST on Cancellation of Confirmed Train Ticket!

Indian Railways charges a cancellation fee when one cancels confirmed tickets. The cancellation of a confirmed train ticket will be costlier as it would attract Goods and Services Tax (GST)..

According to a circular issued by the Finance Ministry on August 3, cancellation of train tickets or hotel bookings will now attract GST.

The circular explains that booking a train ticket is a contract in which the service provider promises to offer a service.

When the contract is breached by the passenger, by the cancellation of a train ticket, the service provider is compensated with a small amount, collected as a cancellation charge.

Since the cancellation charge is a payment instead of a breach of contract, it will attract GST, according to the Finance Ministry circular.

Cancellation charges of railway tickets for a class would attract GST at the same rate as applicable to the class of travel.