Railways Extends Service Charge Waiver On E-Transactions Till September

New Delhi: To promote cashless transactions, the service charges on booking train tickets online have been further extended till end of September. Online bookings made through Indian Railway Catering and Tourism Corporation (IRCTC) earlier attracted service charge per ticket ranging from Rs. 20 (for sleeper class) to Rs. 40 (air-conditioned classes). On November 8, 2016, the government's decision to ban Rs 1,000 and Rs 500 denomination notes, which were 86% of the currency in circulation, led to a sudden cash crunch and provided an opportunity for shift to online and other digital modes of payment. To further encourage cashless transactions, the government decided that service charge on online booking of train tickets would be withdrawn for tickets booked from November 23, 2016, to March 31, 2017. Later, on April 1, 2017, Indian Railways received instructions from the Ministry of Information and Technology advising the public transporter to extend the exemption period to June 30. Now, the train passengers will continue to be exempted from service charge till September end. This has been done to incentivise passengers to pay through digital modes for booking tickets.

Nov 2016 when government banned Rs 1,000 and Rs 500 denomination notes which were 86% of the currency in circulation. This led to a sudden cash crunch and provided an opportunity for shift to online and other digital modes of payment.

According to railways data, an approximate amount of Rs. 184 crore was not realised from passengers on account of the exemption of service charge and service tax on reserved tickets booked online from November 23, 2016 to February 28, 2017. IRCTC, the ticketing agency of Indian Railways which shares half of the service charge revenue with the railways, is expected to lose about Rs. 500 crore a year due to the exemption. The Railway Ministry, however, has written to the Finance Ministry seeking reimbursement of the loss.
 
However, the service charger waiver is just one of the several steps taken by Indian Railways to accelerate the surge in digital transactions. Indian Railways also offers a discount of 0.5 percent on monthly or seasonal tickets which are booked online. It also provides free accidental insurance cover worth Rs 10 lakh for buying railway tickets online and 5 percent discount on services such as catering and retiring rooms.

Notably, the Indian Railways, which has over 8 billion passenger traffic every year, already has moved 68 percent of passenger business transactions (ticket reservation), to cashless modes.

With inputs from PTI