Now, GST charge on cancellation of train tickets, hotel bookings

According to the Finance Ministry's new circular, passengers will also have to pay the same amount of GST on cancellation charges. So, in case of cancellation of a confirmed AC first class ticket, a passenger must pay Rs 12 more (5 per cent of Rs 240) towards GST, thus making it a total cancellation fee of Rs 252.

Customers who cancel their hotel, flight, other travel, or entertainment event reservations will be required to pay GST. The same logic would apply to cancellations of air travel or hotel accommodations, where cancellation fees would be taxed at the same GST rate as the primary service.

As per the circular issued by the Finance Ministry's Tax Research Unit, booking of tickets is a ‘contract’, under which the service provider (IRCTC/Indian Railways) promises to provide services to the customer.

Now, you have to pay more for cancelling the confirmed rail tickets for AC and first class. The cancellation of confirmed train tickets would now attract Goods and Services Tax (GST) of 5 percent, according to a circular issued by the Ministry of Finance.

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